If an Individual Consumes Only Two Goods and Consumption of One

question 395

Multiple Choice

If an individual consumes only two goods and consumption of one good increases, then in order to keep the consumer on the same indifference curve, consumption of the other good must

• A) increase.
• B) decrease.
• C) increase proportionately.
• D) become negative.

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Definitions:

Deficit Spending

The practice of spending more money than is taken in through revenues, leading to a government budget deficit, often financed by borrowing.

Demobilized Soldiers

Military personnel who are discharged back into civilian life after their service, often following the end of a war or military conflict.

Unemployment

The situation when individuals who are capable of working and are actively seeking employment are unable to find a job.

World War

World War usually refers to one of the two global military conflicts of the 20th century, either from 1914 to 1918 or from 1939 to 1945, involving many of the world's nations.