If the crowding-out effect is at its maximum strength, it follows that an increase in government spending would:
A. Cause aggregate demand and GDP to increase
B. Cause aggregate demand and GDP to decrease
C. Not affect aggregate demand and GDP
D. Not cause the budget deficit to increase
C. Not affect aggregate demand and GDP
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
Suppose a market were currently at equilibrium. A rightward shift of the supply curve would cause a(n)
A) increase in price but a decrease in quantity. B) decrease in price but an increase in quantity. C) increase in both price and quantity. D) decrease in both price and quantity.
The consumption function assumes that
What will be an ideal response?
Refer to the graph shown. If government establishes a price floor of $7.25 per hour, there will be a:
A. shortage of 300 labor hours. B. surplus of 400 labor hours. C. surplus of 300 labor hours. D. shortage of 400 labor hours.