The following is an investment schedule. Investment spending is in billions of dollars.
Refer to the data in the table above. Assume that private investment spending is initially $78 billion. If the government finances a deficit and this action increases the interest rate by 2 percentage points, then the government financing would have potentially crowded out:
A. $92 billion of investment spending
B. $17 billion of investment spending
C. $78 billion of investment spending
D. $14 billion of investment spending
B. $17 billion of investment spending
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Good A is an inferior good. If the price of good A were to suddenly double, the substitution effect would cause the purchases of good A to increase by
A) more than double. B) exactly double. C) less than double. D) Any of the above are possible. E) none of the above
Game theory shows that cartels
a) should be expected b) allow firms to maximize joint profit c) allow firms to overcome the less desired outcome consider with the person's dilemma d) all of the above
A pair of hiking boots costs $120 in the U.S., if the real exchange rate is 6/5 and the nominal exchange rate is 2 Brazilian reais per dollar, what is the price of the same hiking boots in Brazil? Show your work
Draw a long-run average cost curve that first exhibits increasing returns to scale (economies of scale), then constant returns to scale, and finally decreasing returns to scale (diseconomies of scale). Label each region