The Property of Diminishing Marginal Rate of Substitution Follows from the Property

question 26

Multiple Choice

The property of diminishing marginal rate of substitution follows from the property that the indifference curves are

• A) downward sloping.
• B) upward sloping.
• C) bowed in toward the origin.
• D) bowed out from the origin.

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Definitions:

Federal Budget Deficit

is the financial shortfall when the government's expenditures exceed its revenues within a given fiscal year.

National Debt

The total amount of money that a country's government has borrowed, by various means, to fund its activities beyond its revenues.

Budget Act

A legislative act that governs budgetary allocations and the process of budget creation and approval by a government.

Marginal Tax Rate

Additional taxes paid divided by taxable income.