The crowding-out effect is:

A. strongest when the economy is at full employment.
B. strongest when the economy is in a deep recession.
C. weakest when there is demand-pull inflation.
D. equally strong, regardless of the state of the macroeconomy.


A. strongest when the economy is at full employment.

Economics

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If bananas were used as money, which of the following functions of money would be the hardest for bananas to satisfy?

A) unit of account B) store of value C) divisibility D) medium of exchange

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Detrimental externalities like pollution are a shortcoming of the market mechanism. Do they occur in free market economies alone? Explain with examples.

What will be an ideal response?

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Which is NOT a necessary condition for price discrimination to exist?

A) The firm must face a downward sloping demand curve. B) The firm must identify buyers with different elasticities of demand. C) The firm must be able to prevent resale of the product or service. D) The firm must establish different prices to reflect marginal cost.

Economics

If firms in a monopolistically competitive industry are making economic profits: a. firms will likely be subject to regulation. b. barriers to entry will be strengthened

c. new firms will enter the market. d. some firms must exit the market.

Economics