Critics of Keynesian fiscal policy argue that deficit spending will not stimulate the economy, because higher interest rates will discourage consumption and investment. This argument is known as the:
a. deficit-substitution effect.
b. multiplier effect.
c. burden-of-debt effect.
d. crowding-out effect.
d
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A cost due to an increase in activity is called
A) an incentive loss. B) a marginal cost. C) a negative marginal benefit. D) the total cost.
Recessions in Canada and Mexico would cause
a. the U.S. price level and real GDP to rise. b. the U.S. price level and real GDP to fall. c. the U.S. price level to rise and real GDP to fall. d. the U.S. price level to fall and real GDP to rise.
Moral hazard is a problem that arises:
A. before the parties have entered into an agreement. B. rarely in any market. C. either before or after the parties have entered into an agreement. D. after the parties have voluntarily entered into an agreement.
In a market system, the costs associated with exchanging goods are known as
A. voluntary costs. B. opportunity costs. C. signaling costs. D. transaction costs.