The crowding in of private investment is more likely to occur, when _____
a. there is a depreciation of domestic currency
b. interest rates increase significantly
c. a contractionary gap exists in an economy
d. the deficits lower expectations about economic growth
e. an expansionary gap exists in an economy
c
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If a union is able to decrease the supply of workers in a competitive labor market but the union cannot affect the demand for its members' labor, then
A) wages and the quantity of labor hired will both increase. B) wages will increase but the quantity of labor hired will decrease. C) wages will decrease but the quantity of labor hired will increase. D) wages and the quantity of labor hired will both decrease.
After participating members of a cartel form an agreement on common prices and output quotas, then an individual firm can increase its own profits by
A) increasing production. B) increasing prices. C) leaving the cartel. D) incurring higher input costs.
When political officials have substantial discretionary power to override the rule of law,
A) uncertainty is reduced and the government will be able to promote economic progress more effectively. B) this creates uncertainty and makes business activity less attractive. C) business investment will increase because the rule of law will no longer stifle investment. D) the incentive to solicit bribes and political favors is weak.
The demand for hamburger buns is known to be elastic. This means that if the price of the product increases,
A. total revenue will rise. B. total revenue will stay the same. C. the quantity demanded will rise. D. total revenue will fall.