The crowding out effect of expansionary fiscal policy refers to which of the following?
A) a reduction in private sector planned investment
B) a reduction in the stock of inventories
C) the reduction in the size of the budget deficit
D) the reduction in the size of the recessionary gap
A
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Suppose that an industry is characterized by a few firms and price leadership. We would expect that:
A. price would equal marginal cost. B. price would equal average total cost. C. price would exceed both marginal cost and average total cost. D. marginal revenue would exceed marginal cost.
Product % Change in Income % Change in Quantity Demanded W -1 -1 X +6 +3 Y -1 +1 Z +4 +8 Refer to the above table. Which product is a normal good but least responsive to a change in income?
A. Product W B. Product Z C. Product Y D. Product X
Advertising has no effect on the demand schedule for a good.
Answer the following statement true (T) or false (F)
Keynes was especially concerned with explaining the ________ level of output and employment during the ________
A) low; 1920s B) low; 1930s C) high; 1920s D) high; 1930s