In 2008, Germany had a budget deficit of 37 billion euros. This deficit resulted in
A) a rightward shift of the supply of loanable funds curve.
B) a leftward shift of the demand for loanable funds curve.
C) a crowding out effect in which investment decreases.
D) the Ricardo-Barro effect and an increase in the interest rate.
C
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The supply-siders argue that investment is
a. primarily a function of current income. b. highly responsive to changes in after-tax real interest rates. c. primarily a function of expectations. d. both a and b.
Suppose Mexico can produce 5 autos or 10 corn. Suppose the United States can produce 4 autos or 20 corn. If opportunity costs are constant for both countries, then
A) the United States has a comparative advantage in corn production. B) Mexico has a comparative advantage in corn production. C) the United States cannot gain from trade with Mexico. D) the United States has a comparative advantage in auto production.
The present value of benefits (PVB) is found as
a. the discounted value of benefits for a single period without adjusting for inflation b. ?(bt/[1+rs]t), with bt= Bt/(1 + p)t c. ?(bt/[1–rs]t), with bt= Bt/(1 + p)t d. ?(bt/[1+rs]t), with bt= Bt/(1 –p)t
Agriculture price supports that establish a price floor at which agricultural products may be purchased that exceeds the market clearing price
A. result in the quantity of these products supplied exceeding the quantity demanded at the floor price. B. benefit taxpayers, who receive subsidies from producers that the price support program forces to sell to the government at an artificially established price. C. benefit consumers, who are willing and able to purchase more agricultural products at the floor price. D. create a shortage of agricultural products.