The president wishes not only to increase spending for education by $4 billion but also to maintain a balanced budget. Therefore, taxes will also be increased by $4 billion. What will happen to GDP?

A. It will increase.
B. It will remain the same.
C. It will decrease.
D. It’s impossible to know without the multiplier.


Answer: A

Economics

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Which of the following statements regarding preferences and indifference curves is true?

A. When choosing between two consumption bundles, a consumer will always prefer the consumption bundle on the lower indifference curve. B. A consumer is indifferent between two consumption bundles that are on the same indifference curve. C. When choosing between two consumption bundles, a consumer will always prefer the consumption bundle that is farthest to the right on an indifference curve. D. When choosing between two consumption bundles, a consumer will always prefer the consumption bundle that is farthest to the left on an indifference curve.

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If a firm buys some labor in a competitive market and some labor as a monopsonist, the firm is most likely to

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Economics