The "crowding out" effect refers to the:
A. increase in domestic investment by foreigners, leaving little investment choice for domestic investors.
B. irrational exuberance of the market reducing the number of rational investments available.
C. reduction in the interest rate caused by governments running a deficit.
D. reduction in domestic investment caused by governments running a deficit.
Answer: D
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When there are too few or too many resources going to an economic activity
A) a public good exists. B) a market failure exists. C) consumer sovereignty exists. D) scarcity of resources no longer exists.
The above figure shows the apartment market in Big City. A rent ceiling of $1100 would
A) not create a black market. B) create a shortage of apartments. C) decrease search activity. D) shift the supply curve rightward.
DeBeers is a natural monopoly in the world's diamond trade
a. True b. False
The law of diminishing returns explains why short-run marginal cost curves are upward sloping.
Answer the following statement true (T) or false (F)