Suppose the U.S.government has an annual budget of about $4 trillion.Does the U.S.government face the problem of scarcity?
A)No, a government with $4 trillion in spending faces no real constraints.
B)No, scarcity does not apply to governments.
C)Yes, resources are limited even for the U.S.government.
D)Yes, although the U.S.government can easily obtain more resources.
E)Uncertain, economic theory has no answer to this question.

Question

Quizplus · Accepted Answer

Scarcity applies to all economic actors, including governments. Even though the U.S. government has a large annual budget of about $4 trillion, it still faces the problem of scarcity because resources are limited and the government must make choices about how to allocate those resources.