Figure 14-3 -Refer to Figure 14-3.Which of the Following Is Consistent with Following

question 103

Multiple Choice

Figure 14-3

-Refer to Figure 14-3.Which of the following is consistent with the graph depicted above?

• A)Taxes are changed so that real interest income is taxed rather than nominal interest income.
• B)An expected recession decreases the profitability of new investment.
• C)The government runs a budget deficit.
• D)Technological change increases the profitability of new investment.

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Definitions:

Marginal Cost

The expense incurred from manufacturing an extra unit of a product or service.

Total Social Benefit

The total benefit to society from producing or consuming a good, including both private benefits and any external benefits.

Total Individual Benefit

The total value or satisfaction that an individual derives from consuming a particular quantity of goods or services.

Marginal Benefit

The supplementary enjoyment or advantage gained by consuming another unit of a good or service.