Crowding out occurs when
a. investment declines because a budget deficit makes interest rates rise.
b. investment declines because a budget deficit makes interest rates fall.
c. investment increases because a budget surplus makes interest rates rise.
d. investment increases because a budget surplus makes interest rates fall.
a
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The reason that it is possible for the economy in the above figure to be at equilibrium point E2 rather than at equilibrium point E1 is that
A) in the long run there is always less than full employment. B) in the short run the economy can produce more than it can in a long-run situation. C) AD always shifts rightward and never shifts leftward. D) the economy must be in a recession.
In recent years, average household income in the United States was highest for households headed by someone aged
A) 35 to 44. B) 45 to 54. C) 55 to 64. D) 65 and over.
Governments grant patents to encourage
A) low prices. B) firms to form public enterprises. C) research and development on new products. D) competition.
Roger lives in Iceland and purchases a snowmobile manufactured in the United States. This purchase is
A. both a U.S. and Icelandic export. B. both a U.S. and Icelandic import. C. a U.S. import and an Icelandic export. D. a U.S. export and an Icelandic import.