the government in mortorania buys $20 million in goods and services,collects $15 million in taxes,and borrows the remaining $5 million.its taxes produce no dead weight costs.what is the cost of government in mortorania?
To calculate the cost of government in Mortorania, we need to understand that the cost of government is primarily financed through taxes and borrowing. The cost is essentially the amount of money the government needs to raise to fund its activities.
In this scenario, the government in Mortorania collects $15 million in taxes and borrows an additional $5 million, resulting in a total of $20 million ($15 million from taxes + $5 million from borrowing).
So, the cost of government in Mortorania is $20 million.