Which of the following is a reason why we should consider the federal national debt a problem?
A) If the debt was incurred to finance research and development, crowding out will occur.
B) If the debt drives up interest rates, crowding out will occur.
C) The federal government is in danger of defaulting on its debt.
D) If the debt was incurred to finance improvements in infrastructure, crowding out will occur.
B
You might also like to view...
Which of the following is a legal barrier to entry?
i. public franchise ii. government license iii. patent A) iii only B) i and iii C) ii and iii D) i, ii, and iii E) i and ii
Joe's Pizza Shop only makes pizza. If each pizza requires five people, each of whom specializes in one task, this method of production is an example of
A) economies of scope. B) team production. C) economies of monitoring. D) economies of coordination.
A market failure associated with Keynesian economics is
A) pollution externalities. B) economic agents cannot agree on prices and wages that are socially efficient. C) insurance is imperfect. D) banking panics.
Suppose Larry's Lariats produces lassos in a factory, and uses nine feet of rope to make each lasso. The rope is put into a machine that automatically cuts it to the right length, then seals the ends to prevent fraying. The rope is then hand tied, dipped, and wound before being placed in a packaging machine to prepare it for retail sale. If Larry were to decrease the production of lassos, which of the following is true regarding the company's costs?
A. The fixed cost of the rope cutting machine would stay the same. B. The variable costs of rope would drop to zero. C. The fixed cost of the employee's wages would stay the same. D. None of these is true.