Assume that the economy is in a recession and there is a budget deficit. A strict balanced-budget rule that would require the Federal government to balance its budget during a recession would be:

The relationship in the above figure suggests that when the interest rate is 5 percent

A) a decrease in income will be associated with a decrease in expenditures. B) a decrease in income will be associated with an increase in expenditures. C) an increase in income will be associated with a decrease in expenditures. D) there is no relationship between expenditures and income.

During a study session for an economics exam with three other students, Peter Daltry commented on an example of a consumer who had to decide on number of slices of pizza and cups of Coca-Cola he would consume

Peter explained that "To maximize his utility this consumer must equate the marginal utility per dollar for pizza and Coca-Cola." Was Peter's analysis correct? A) Peter described one of the conditions necessary for utility maximization. The consumer also must equate the marginal utility of pizza and the marginal utility of cups of Coca-Cola. B) Peter's statement is correct but we must also assume that the consumer is rational. C) Peter describes one of the conditions necessary for utility maximization. The second condition is that total spending on both goods must equal the amount available to be spent. D) Peter's statement is correct.