Which of the following is an example of market "production," as used by economists?
A) Garvey takes out a low-cost government loan to start his pet-sitting business.
B) Heidi makes a pizza for her family's dinner.
C) Katrina works as a cashier at the local produce stand.
D) The theatre and film studies department in Fine Art's College stages a play at the local theatre.
Answer: D
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Which of the following correctly describes a way in which deficit spending can impose a burden on future generations?
I. Failure to allocate deficit spending to uses that boost future real Gross Domestic Product (GDP) will require taxing future generations at a higher rate to repay the resulting higher public debt. II. Government deficits that lead to higher employment and real Gross Domestic Product (GDP) in the future will generate increased income taxes for future governments, which will respond by spending the higher tax revenues, creating higher future government budget deficits. III. Other things being equal, deficit spending fuels increased consumption of goods and services by the current generation that crowds out capital investment, thereby leaving future generations with a smaller stock of capital than otherwise would have existed. A) I only B) II only C) I and III only D) II and III only
If disposable income decreased, which of the following changes in the consumption-function line would occur?
a. A rightward movement along the line b. A leftward movement along the line c. The entire line would shift upward d. The entire line would shift downward e. The entire line would shift downward and there would be a rightward movement along the new line