ECON 203 CONSUMER BEHAVIOR UTILITY
MAXIMIZATION STUDY GUIDE COMPLETE
QUESTIONS 2026
◉ when gove spending does down
Answer: ad to the left
◉ tax policy
Answer: consumption depends on after tax income
◉ expansionary vs contractionary
Answer: up AD or lower AD
◉ Information lag
Answer: data takes a while to collect
◉ Formultion Lag
Answer: Democracy
◉ Implementation Lag
,Answer: things take time
◉ Ricardian equivalence
Answer: financing gov spending through debt instead of taxes does
not affect economic demand because; people are rational and will
not spend if they suspect that the taxes will go back up, and will save
instead of spendning
◉ if the government needs to borrow money to increase spending
Answer: then oney becomes more expensive and interest rates go up
◉ Economy booming
Answer: unemployment goes down, less government spending, ad
goes down
◉ Economy recesssing
Answer: more unemployment, government spending goes up, ad
goes up
◉ welfare policy does what with the economy
Answer: contracts and expands
◉ balanced budget
, Answer: when tax revenues and expenditure equal each other
◉ budget surplus
Answer: when the tax revenues out end the expenditure
◉ budget deficit
Answer: when the expenditures out end the tax revenues
◉ debt
Answer: amount the gov owes.
◉ gov borrows how?
Answer: selling treasury securities
◉ short term treasury securities
Answer: less than 1 year
◉ longer term treasury securties
Answer: treasury notes, 2,3,5,7,10
◉ longest term treasury securities
Answer: 30 years with biannual interest
MAXIMIZATION STUDY GUIDE COMPLETE
QUESTIONS 2026
◉ when gove spending does down
Answer: ad to the left
◉ tax policy
Answer: consumption depends on after tax income
◉ expansionary vs contractionary
Answer: up AD or lower AD
◉ Information lag
Answer: data takes a while to collect
◉ Formultion Lag
Answer: Democracy
◉ Implementation Lag
,Answer: things take time
◉ Ricardian equivalence
Answer: financing gov spending through debt instead of taxes does
not affect economic demand because; people are rational and will
not spend if they suspect that the taxes will go back up, and will save
instead of spendning
◉ if the government needs to borrow money to increase spending
Answer: then oney becomes more expensive and interest rates go up
◉ Economy booming
Answer: unemployment goes down, less government spending, ad
goes down
◉ Economy recesssing
Answer: more unemployment, government spending goes up, ad
goes up
◉ welfare policy does what with the economy
Answer: contracts and expands
◉ balanced budget
, Answer: when tax revenues and expenditure equal each other
◉ budget surplus
Answer: when the tax revenues out end the expenditure
◉ budget deficit
Answer: when the expenditures out end the tax revenues
◉ debt
Answer: amount the gov owes.
◉ gov borrows how?
Answer: selling treasury securities
◉ short term treasury securities
Answer: less than 1 year
◉ longer term treasury securties
Answer: treasury notes, 2,3,5,7,10
◉ longest term treasury securities
Answer: 30 years with biannual interest
