If the government decreased urban welfare payments by a dollar for every dollar increase in farm subsidies, which of the following is the likely net effect?
a. An increase in the budget deficit because government spending has increased
b. A decrease in the budget deficit because transfer payments are not included in the government's budget
c. An increase in the budget deficit because transfer payments have increased
d. An increase in the budget deficit because farm subsidies are transfer payments but urban welfare payments are not
e. No change in the budget deficit
e
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Crops that are grown primarily to sell, rather than to consume, are referred to as
a. staples b. subsistence crops c. cash crops d. market crops e. none of the above
In a bakery for a given amount of croissant production, an additional pastry worker produces 100 additional croissants, and one extra mixing machine produces 50 extra croissants. Each pastry worker costs $30 to hire, and a mixing machine costs $10 per unit. The bakery owner should
A. produce fewer croissants. B. hire an additional pastry worker. C. purchase an additional mixing machine and use one less pastry worker. D. hire an additional pastry worker and sell a mixing machine.
For an individual's supply curve of labor to be upward sloping:
a. the substitution effect must be greater than the income effect. b. the substitution effect must be equal to the income effect. c. the substitution effect must be less than the income effect. d. is an impossibility.
Suppose the U.S. government institutes a "Buy American" campaign, in order to encourage spending on domestic goods. What effect will this have on the U.S. trade balance?