Refer to the diagram. If the budget line shifts from ab to ac, the:
A. consumer's level of total utility will increase.
B. consumer will purchase more of both J and K.
C. consumer will purchase less of both J and K.
D. consumer will purchase more of J and less of K.
D. consumer will purchase more of J and less of K.
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The crowding-out effect is the tendency for
A) higher government budget deficits to increase total savings. B) lower private saving to decrease investment. C) higher government budget deficits to decrease investment. D) higher private savings to decrease government budget surpluses. E) lower private saving to increase the budget deficit.
Which of the following statements about economic models is TRUE?
A) A good economic model is complex. B) A good model does not rely on any assumptions. C) Every model is based on a set of assumptions. D) Economic models are designed to explain what people need.
The demand for reserves increases as the price level rises because
a. people want money to buy goods that will appreciate with inflation. b. people need more money to finance transactions. c. the opportunity cost of holding money increases. d. higher prices reduce the value of dollar assets.
a competitive market is important to society because it directs resources toward projects that
What will be an ideal response?