Expansionary fiscal policy that raises the budget deficit may:
A. increase business investment by reducing interest rates.
B. reduce business investment by reducing interest rates.
C. increase business investment by increasing interest rates.
D. reduce business investment by increasing interest rates.
Answer: D
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According to opportunity-cost theory, if more people learned how to repair their own automobiles, the wages of automotive mechanics would
A) decline as the highest-cost mechanics left the business. B) decline, because the marginal quality of the services provided would go down. C) not change because no change has occurred in demand or supply. D) rise, because mechanics would have to obtain more per hour to maintain their incomes. E) rise in order to compensate for the smaller demand.
If the government set a price floor at $18
A. there would be a temporary surplus, then prices would fall to equilibrium.
B. the price floor would not have any effect on this market.
C. then quantity demanded would be greater than quantity supplied.
D. there would be a permanent surplus, at least until the price floor was lifted.
In a particular town, Comvision and Veriview are the only two providers of cable TV service. Comvision and Veriview constitute a
a. duopoly, whether they collude or not. b. cartel, whether they collude or not. c. Nash industry, whether they collude or not. d. monopolistically competitive market if they charge the same price.
(Consider This) According to economists Krueger and Perri:
A. despite the fact that income inequality has increased in recent decades, consumption inequality has remained relatively constant. B. increases in income inequality over recent decades understate the growth in consumption inequality. C. both income and consumption inequality have increased at approximately the same rate over recent decades. D. both income and consumption are more equally distributed than they were 30 years ago.