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
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Which is larger: the present value of $1 two years from now or the present value of $1 one year from now? Explain
What will be an ideal response?
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.
The compensated demand curve
A. shows how the quantity demanded changes when the price changes. B. shows how income is compensated, so that the individual's commodity bundle stays on the same indifference curve. C. is sometimes referred to as the Hicksian demand curve. D. all of these answer options are correct.
If a firm buys some labor in a competitive market and some labor as a monopsonist, the firm is most likely to
A) pay the same wage to both types of labor. B) pay a lower wage to the labor purchased in the competitive market. C) pay a higher wage to the labor purchased in the competitive market. D) not exercise any of its monopsony power.