If Preferences Are Homothetic and All Prices Double While Income

question 52

True/False

If preferences are homothetic and all prices double while income remains constant, then demand for all goods is halved.

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Definitions:

Public Choice Theory

A branch of economics that studies how economic theories and methodologies can be applied to political science, focusing on the behavior of voters, politicians, and government officials.

Government Decision Making

The process by which government bodies decide on policies, laws, and budget allocations among other official actions.

Budget Deficits

A financial situation where a government's expenditures exceed its revenues, leading to increased borrowing or reduced spending.

Public Debt

The total amount owed by the federal government to the owners of government securities; equal to the sum of past government budget deficits less government budget surpluses.