Explain how indirect crowding out can offset expansionary fiscal policy
What will be an ideal response?
If the government increases spending, it must pay for them some way. If it increases borrowing, interest rates increase. Firms will issue fewer bonds because of the higher interest rates, so private investment spending is reduced. This reduction in investment spending partially offsets the increased government spending.
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A monopolistic competitive firm in the long run sets price equal to the minimum point on the long-run average cost curve
a. True b. False Indicate whether the statement is true or false
Usury laws are often politically popular because
a. few people sympathize with banks and other lenders who are suspected of price gouging. b. consumers are in favor of the lower lending rates. c. those concerned with affordable housing for the poor favor ceilings on mortgage rates. d. All of the above are correct.
Which voter is the voter whose views on a policy issue are in the middle of the spectrum, with half of the voters on one side of this voter's view and half on the other side
a. Average voter b. Mean voter c. Modal voter d. Median voter
You have two options for how to spend the afternoon. You can either go see a movie with your roommate or work as a tutor for the Math Department. From experience, you know that going to see a movie gives you $20 worth of enjoyment, and with your student discount, a movie ticket only costs $12. If you spend the afternoon working as a math tutor, you will get paid $45. On a typical day, you wouldn't be willing to spend the afternoon working as a math tutor for less than $35. What is your opportunity cost of seeing a movie this afternoon?
A. $57 B. $8 C. $12 D. $22