Author Question: You notice that the price of orange juice at your local grocery store has increased. Which of the ... (Read 83 times)

Awilson837 · **on:** Jun 30, 2018

You notice that the price of orange juice at your local grocery store has increased. Which of the following statements is not a possible explanation for the rise in the price of orange juice?
a. Frosty weather destroys oranges causing the price of oranges to increase.
b. As a result of an increase in income, consumers wish to purchase more orange juice at every price level.
c. A recent scientific study is reported in the press that suggests that apple juice may be contaminated with pesticides.
d. Due to the bioengineering of orange trees, the domestic supply of oranges increases.

Question 2

Which of the following is true?
a. The tax multiplier is smaller than the government spending multiplier.
b. The government cannot stimulate consumer spending through tax cuts.
c. The government spending multiplier is smaller than the tax multiplier.
d. The government can stimulate consumer spending through decreases in transfer payments.