If a Budget Surplus Leads to a Decrease in U

question 118

Multiple Choice

If a budget surplus leads to a decrease in U.S. real interest rates, the lower rates will tend to cause

• A) the dollar to appreciate.
• B) the dollar to depreciate.
• C) a decrease in private investment.
• D) a decrease in net exports.

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Definitions:

Marginal Utility

The supplementary contentment or advantage received from the consumption of one more unit of a product or service.

Total Utility

The total satisfaction received by a consumer from consuming a certain quantity of goods or services.

Labor Supply Curve

A graphical representation showing the relationship between the wage rate and the quantity of labor that workers are willing to offer at different wage rates.

Income Effect

The change in an individual's consumption patterns resulting from a change in their real income.