According to the new classical view, if people appropriately realize that an increase in government debt implies higher future taxes, they will
a. save less since the substitution of debt for taxes makes them wealthier.
b. increase their consumption since the substitution of debt for taxes makes them wealthier.
c. save more now to meet the future tax liability implied by the increase in debt.
d. alter neither their saving nor their consumption rate.
C
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Suppose a used car dealer can earn an additional $25,000 in revenue per year by increasing advertising on a local radio station from 3 times a day to 5 times a day
At what additional cost would this increase in advertising not be considered economically rational?
If mortgages and houses are complements in consumption and interest rates decrease, we would expect to see
a. An increase in demand for houses b. An decrease in demand for houses c. An increase in the quantity of houses demanded d. An decrease in the quantity of houses demanded
Denise values a stainless steel dishwasher for her new house at $500 . The actual price of the dishwasher is $650 . Denise
a. buys the dishwasher, and on her purchase she experiences a consumer surplus of $150. b. buys the dishwasher, and on her purchase she experiences a consumer surplus of $-150. c. does not buy the dishwasher, and on her purchase she experiences a consumer surplus of $150. d. does not buy the dishwasher, and on her purchase she experiences a consumer surplus of $0.
Which of the following is an example of a positive statement?
A. Ceteris paribus, a teacher should award a higher grade if you study more hours for an economics test. B. When the price of an item increases, people respond by reducing their consumption of the item. C. The government should balance the budget. D. It is too hot to go jogging.