Which of the following most clearly states the "paradox of thrift"?
a. If households simultaneously attempt to increase their savings, the result may be a reduction in demand, output, and total savings.
b. A strong, healthy economy can be achieved if most households are heavily in debt.
c. A high savings rate will provide the funds for investment, which is a driving force of long-term economic growth.
d. A reduction in savings and an increase in consumption will expand output and employment.
A
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In exchange for a share of the revenues earned on campus, State U has granted CheapFizz the exclusive right to sell soft drinks in the student union and in vending machines on campus. Prior to the deal, three soft drink companies sold beverages on campus; now no other soft drink company is allowed to sell its products on campus. Prior to the deal, a 12-ounce can of CheapFizz sold for 75 cents. After the deal you would expect a 12-ounce can of CheapFizz to sell for:
A. more than 75 cents because the demand curve for CheapFizz soda will shift to the left. B. more than 75 cents because CheapFizz is the only company that can sell soda on campus. C. less than 75 cents because CheapFizz will have greater volume and so can lower its price. D. 75 cents because that is the market price.
Refer to the graph below. Which of the following factors does not explain a movement along the AD curve?
A. The expenditure multiplier effect
B. The real-balances effect
C. The interest-rate effect
D. The foreign purchases effect
Input prices fall as entry occurs in a decreasing-cost industry.
Answer the following statement true (T) or false (F)
The Drinking Water State Revolving Fund (DWSRF)
a. was established under the Safe Drinking Water Act of 1974 b. received no additional funding from the American Recovery and Reinvestment Act c. initially authorized $1 billion per year for infrastructure improvements d. all of the above