The crowding out effect:
A. increases the multiplier effect, so that an increase in taxes reduces income by less.
B. decreases the multiplier effect, so that an increase in taxes reduces income by less.
C. increases the multiplier effect, so that an increase in taxes reduces income by more.
D. decreases the multiplier effect, so that an increase in taxes reduces income by more.
Answer: B
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If the agent has more information than the principal and there is only one state of nature, then
A) efficiency in both production and risk-bearing can be achieved. B) only efficiency in production can be achieved. C) only efficiency in risk-bearing can be achieved. D) neither efficiency in production nor efficiency in risk-bearing can be achieved.
According to the text, which of the following statements is true?
A. The price elasticity of Honda Accords exceeds the price elasticity of demand for BMWs. B. The price elasticity of BMWs exceeds the price elasticity of demand for Honda Accords. C. The cross-price elasticity of demand for Hondas and BMWs is relatively large. D. The income elasticity of demand for BMWs is negative.
Which of the following is false?
A. The federal government's fiscal year begins on October 1. B. The largest federal government purchase of final goods and services is Social Security. C. The corporate income tax is a direct tax.
Privately owned banks and thrift institutions that accept deposits and make loans are known as
A. systemic risks. B. financial holding companies. C. depository institutions. D. fiduciary institutions.