An increase in taxes will ________ consumption spending, and a ...

[jlmhmf]

An increase in taxes will ________ consumption spending, and a decrease in transfer payments will ________ consumption spending.
 
  A) decrease; increase B) decrease; decrease C) increase; decrease D) increase; increase

Question 2

The GDP deflator in year 2 is 105, using year 1 as the base year. This means that, on average, the cost of goods and services is
 
  A) 5 higher in year 2 than in year 1. B) 105 higher in year 1 than in year 2.
  C) 105 higher in year 2 than in year 1. D) 5 higher in year 1 than in year 2.

[SamMuagrove]

Answer to Question 1

B

Answer to Question 2

A