Use the Figure Below to Answer the Following Question(s)

question 17

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 12-3

-Refer to Figure 12-3.If an economy is currently operating at Y₁,which of the following would a Keynesian economist be most likely to favor?

• A)a shift in the federal budget toward a surplus
• B)a shift in the federal budget toward a deficit
• C)a balanced budget
• D)an increase in taxes

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Definitions:

Diminishing Marginal Utility

The principle that as a person consumes more of a product, the satisfaction (utility) gained from each additional unit decreases.

Consumer Behavior

The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.

Substitution Effect

The change in the quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods.

Consumer Behavior

The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs.