One of the major drawbacks of crowding out is that it:
a. decreases the rates of interest in the economy
b. increases the rates of interest in the economy.
c. decreases the short-run growth rate of the economy.
d. prohibits foreign investments in an economy.
b
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If the demand for a firm's output is perfectly elastic, then the firm's Lerner Index equals
A) zero. B) one. C) infinity. D) one-half.
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and real GDP in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and real GDP rises. b. The real risk-free interest rate and real GDP remain the same. c. The real risk-free interest rate rises, and real GDP falls. d. The real risk-free interest rate falls, and real GDP remains the same. e. The real risk-free interest rate falls, and real GDP falls.
Over time, housing shortages caused by rent control
A.decrease, because the demand for and supply of housing are less elastic in the long run. B.decrease, because the demand for and supply of housing are more elastic in the long run. C.increase, because the demand for and supply of housing are more elastic in the long run. D.increase, because the demand for and supply of housing are less elastic in the long run.
If the marginal cost of the 10th unit of output is $15 and the average total cost of the 10th unit of output is $15,
A. average total cost is minimized at 10 units of output. B. average total cost is decreasing at 10 units of output. C. average total cost is increasing at 10 units of output. D. average total cost is maximized at 10 units of output.