A decrease in the economy's expected future income while holding today's income constant would
A. increase today's desired consumption and decrease desired national saving.
B. decrease today's desired consumption and increase desired national saving.
C. increase today's desired consumption and increase desired national saving.
D. decrease today's desired consumption and decrease desired national saving.
Answer: B
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Assume the market is in equilibrium in the graph shown at demand D and supply S2. If the supply curve shifts to S1, and a new equilibrium is reached, which of the following is true?
A. Producer surplus would increase, and total surplus would increase.
B. Producer surplus would decrease, and total surplus would increase.
C. Producer surplus would increase, and total surplus would decrease.
D. Producer surplus would decrease, and total surplus would decrease.
Which of the following statements is positive?
A. When the Federal Reserve increases the money supply, interest rates decrease. B. Large budget deficits should be avoided. C. A tax cut that benefits low-income households is acceptable. D. Higher taxes are needed to support education.
The problem causing most recessions is too little
A) money (currency plus checking accounts). B) spending. C) unemployment. D) taxes.
One problem with the infant industry argument is that
A. it fails to protect domestic industries from foreign competition. B. it must be approved by the Federal Reserve Board. C. it must be approved by the IMF and the World Bank. D. the protection is typically never removed, creating a domestic monopoly.