A federal budget deficit places a genuine burden on future generations when the
A. crowding-out effect is stronger than the crowding-in effect.
B. crowding-in effect is stronger than the crowding-out effect.
C. crowding-out and crowding-in effects work in opposite directions.
D. crowding-out and crowding-in effects operate in the same direction.
Answer: A
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Why is wage and price flexibility an important assumption of the classical model?
A) Flexible wages and prices guarantee that there will be no scarcity. B) Flexible wages and prices allow business firms to fool their workers through the money illusion. C) Flexible wages and prices allow business firms to fool their customers through the money illusion. D) Flexible wages and prices allow markets to reach equilibrium.
Consider an economy with an adult population of 100, 50 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The labor force participation rate is _____
a. 100 percent b. 60 percent c. 50 percent d. 40 percent e. 10 percent
At very high levels of output, total cost tends to:
A. decrease at an increasing rate. B. increase at a constant rate. C. increase at an increasing rate. D. increase at a decreasing rate.
Economists argue that unhindered international trade leads to an efficient outcome. What is meant by "an efficient outcome" in this context?
A. an outcome in which an individual can choose to specialize in a certain line of work and be certain that he or she can make a living at that until retirement B. an outcome in which resources are devoted to their most efficient use C. an outcome in which wages are roughly equal around the world D. an outcome in which the standard of living is roughly equal around the world