What is the primary difference between the substitution and the income effect of a price change?
A) The substitution effect holds income constant and the income effect holds utility constant.
B) The substitution effect is always positive and the income effect is always negative.
C) The substitution effect holds utility constant and the income effect holds prices constant.
D) The substitution effect is always negative and the income effect is always positive.
A
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A government balanced budget is
A) an excess of government spending over government revenues during a given time period. B) a situation in which the government's spending is exactly equal to the total taxes and other revenues it collects during a given time period. C) the total value of all outstanding federal government securities. D) all federal government debt irrespective of who owns it.
If your salary doubled and the cost of living doubled, then your real wage rate would _______.
Fill in the blank(s) with the appropriate word(s).
On average in the United States, gift-giving during the Christmas holiday:
A. wastes about $20 billion. B. wastes about $100 billion. C. wastes about $40 billion. D. wastes about $50 billion.
Supply-side economists favor tax incentives that
A. Discourage infrastructure development. B. Encourage investment. C. Discourage saving and encourage spending. D. Increase the level of government regulation.