The government budget constraint implies that
A) government borrowings = government spending+ transfers - taxes and user charges.
B) government borrowings = taxes and user charges + government spending - transfers
C) government spending = transfers - taxes and user charges - government borrowing.
D) government spending = government borrowing - transfers - taxes and user charges
Question 2
Suppose Brad Pitt and Angelina Jolie wear matching platinum jewelry in their new movie. After the movie is released, suppose that consumers increase their demand for the jewelry and at the same time manufacturers increase the supply of the jewelry.
As a result A) the equilibrium quantity will increase, and there is an indeterminate change in the equilibrium price.
B) the equilibrium quantity and price are both indeterminate.
C) the equilibrium quantity will decrease, and the equilibrium price will increase.
D) the equilibrium price and quantity will both decrease.
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