An increase in government expenditures may lead people to expect that in the future taxes will rise and create greater distortions. By themselves these changes in expectations lead people to
a. raise both consumption and investment.
b. raise consumption but reduce investment.
c. raise investment but reduce consumption.
d. reduce both consumption and investment.
d
You might also like to view...
Beef is a normal good and people's incomes fall. At the same time a bumper corn crop reduces the cost of feeding steers. These changes result in
A) an increase in the equilibrium quantity of beef. B) an increase in the equilibrium quantity of beef if the shift in the demand curve is smaller than the shift in the supply curve. C) an increase in the equilibrium quantity of beef if the shift in the demand curve is larger than the shift in the supply curve. D) no change in the equilibrium quantity of beef.
If a nation does not have an absolute advantage in producing anything, it a. can have no comparative advantage either
b. will have a comparative advantage in the activity in which its disadvantage is the least. c. will benefit if it refuses to trade. d. will export raw materials and import finished products.