Suppose government expenditures on goods and services and net taxes both decrease, and expenditures fall by more than net taxes. The effects of these changes on the budget deficit cause
a. both the equilibrium interest rate and the equilibrium quantity of loanable funds to fall.
b. both the equilibrium interest rate and the equilibrium quantity of loanable funds to rise.
c. the equilibrium interest rate to rise and the equilibrium quantity of loanable funds to fall.
d. the equilibrium interest rate to fall and the equilibrium quantity of loanable funds to rise.
d
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A local electricity-generating company has a monopoly that is protected by an entry barrier that takes the form of
A) a perfectly inelastic demand curve. B) economies of scale. C) control of a key raw material. D) network externalities.
If an economy initially starts away from the steady state ________
A) output will gradually fall over time B) the economy will converge to the steady state in the long-run C) consumption spending must be greater than investment spending D) consumption spending must rise
In perfectly competitive markets, firms operate where MC = MR and because of this, they are not making any economic profit.
Answer the following statement true (T) or false (F)
If countries where wages are far lower than those in the U.S. manufacture similar but vastly cheaper products, then:
a. U.S. consumers will buy those cheaper products b. U.S. producers will lose customers c. There will be a downward pressure on U.S. wages, and reduced employment d. All of the above statements are true.