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 determine the cost of the government in Mortorania, we need to consider the total amount of money spent by the government, including both expenditures and borrowing.
The government in Mortorania spends $20 million on goods and services, collects $15 million in taxes, and borrows $5 million. So, the total spending by the government is $20 million (expenditures) + $5 million (borrowing) = $25 million.
In this case, since the taxes produce no dead weight costs (meaning that there are no negative implications on the economy due to the taxes), we can assume that the government's expenditure of $20 million is the actual cost of the government.
Therefore, the cost of the government in Mortorania is $20 million.