What does the Ricardo-Barro Effect predict?
A) The level of saving in a developed economy will be very low.
B) Government budget deficits crowd out private investment.
C) Private saving will offset the impact of government borrowing.
D) There is no way to explain animal spirits or irrational exuberance.
E) Net investment and gross investment will be equal.
C
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The question "Will doctors or lawyers have higher annual incomes?" represents which of the three basic economic questions?
What will be an ideal response?
Which of the following is true? a. People specialize by concentrating their energies on the activity to which they are best suited, because they incur lower opportunity costs as a result. b. One advantage of specialization is that workers acquire greater skill from repetition
c. If a person, a region, or a country can produce a good or service at a lower opportunity cost than others, we say that they have a comparative advantage in the production of that good or service. d. All of the above are true.
Capital accumulation causes the production possibilities curve to shift inward over time
a. True b. False Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
1) Operation Twist was aimed at lowering long-term interest rates. 2) Other things equal, an expansionary monetary policy will shift the economy's aggregate demand curve to the right. 3) A restrictive monetary policy may be frustrated if the investment-demand curve shifts to the left. 4) A restrictive monetary policy reduces investment spending and shifts the economy's aggregate demand curve to the right.