With complete crowding out, an increase in government spending
A) is completely offset by a reduction in private spending.
B) is matched by an increase in private spending.
C) results in an increase in aggregate supply.
D) results in an increase in aggregate demand.
A
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When an international financial crisis occurs
A) financial lenders protect their investments by pouring money into the ailing country. B) there are no serious financial effects that last more than a few months. C) financial flows can slow to a trickle, influencing economic growth. D) investors sell off bonds and restrict loans as a mechanism to help the country recover.
According to the Ricardo-Barro effect, a government budget
A) deficit decreases private saving supply. B) surplus decreases private investment demand. C) deficit increases private saving supply. D) surplus increases private saving supply. E) deficit decreases private investment demand.
Two goods are said to be complements when a fall in the price of one good:
A) leads to a fall in price of the other good. B) doesn't affect the demand for the other good. C) leads to a left shift in the demand for the other good. D) leads to a right shift in the demand for the other good.
In the above figure, the individual's consumer surplus will be highest if
A) the price of ice cream is $5 per gallon. B) the price of ice cream is $3 per gallon. C) the price of ice cream is $2 per gallon. D) ice cream is free.