Which of the following is true about a lump-sum tax?

a. It prevents efficiency from being attained in competitive markets.

b. It causes substitution effects.

c. It causes income effects.

d. It causes both income effects and substitution effects.

The outstanding federal debt will decline in value if:

a. budget deficits continue.

b. the government runs a budget surplus.

c. the market rate of interest increases.

d. either (b) or (c)

Other things being equal, a government budget surplus:

a. increases the demand for loanable funds.

b. increases the supply of loanable funds.

c. is likely to increase market equilibrium interest rates.

d. is unlikely to affect market equilibrium interest rates.

Which of the following is true about the Social Security pension system in the United States?

a. Pensions received by retired workers are based entirely on their contributions to the Social Security pension trust fund and the investment return on that fund.

b. Pensions received by married retirees with dependents are greater than that received by those without dependents.

c. Gross replacement rates are inversely related to preretirement earnings.

d. both (b) and (c)

Give explanation