The crowding out of private spending by government spending will be greater the
A) less sensitive consumption, investment, and net exports are to changes in interest rates.
B) more sensitive consumption, investment, and net exports are to changes in interest rates.
C) less sensitive consumption, investment, and net exports are to changes in the price level.
D) more sensitive consumption, investment, and net exports are to changes in the price level.
Answer: B
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If Happy Babies sells its baby formula in the United States for 30 percent less than it does in Canada, this is an example of ________.
A) peak-load pricing B) two-part pricing C) third-degree price discrimination D) second-degree price discrimination
Collusion is a situation where businesses:
A. agree to cooperate, and the U.S. government works hard to encourage this behavior. B. have noncooperative outcomes, because they compete outside the public eye. C. agree to cooperate, and their behavior does not serve the public interest. D. act in their own self-interest and ignore what the other businesses are doing.
If a bank has actual reserves of $40,000 and a 20 percent reserve requirement, then the maximum amount of checkable deposits the bank can have if excess reserves are zero is:
a. $100,000. b. $80,000. c. $300,000. d. $20,000. e. $200,000.
The Fed's use of the interest rate it pays banks on their excess reserves
a. is a tool the Fed has used effectively over the past several decades to control the money supply. b. is a tool that can be used to reduce the supply of money, but it cannot be used to expand it. c. is a monetary tool that the Fed introduced in 2008 d. is a tool that could be used to expand the money supply, but it could not be used to reduce it.