The above figure shows Bobby's indifference map for soda and juice. B1 indicates his original budget line. B2 indicates his budget line resulting from a decrease in the price of soda. What change in quantity best represents his income effect?

Economists who argue in favor of rapid deficit reduction claim that deficit reduction will

a. reduce crowding in, reduce interest rates, and increase AS. b. stimulate AD and productivity. c. trigger crowding in, increase investment, and increase AS. d. reduce crowding out, increase investment, and increase AS.

Refer to the diagram below. If box E represents government, box D the resource market, and box B the product market, then flows (5) and (7) represent:

A. Goods and services

B. Government expenditures

C. Resources

D. Net taxes