The crowding-out effect is small when firms are ______.
a. pessimistic about the future
b. optimistic about the future
c. considering sizable future investment
d. operating at full-capacity
a. pessimistic about the future
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Suppose the measured unemployment rate is 7.5% and the true natural rate of unemployment is 5.1%. If the chair of the Fed believes the natural rate of unemployment to be 6.7%, then the chair will
A) stimulate the economy when it should be slowed. B) slow the economy when it should be stimulated. C) stimulate the economy, exactly as called for. D) slow the economy, exactly as called for.
Normative statements i. describe how the world is. ii. describe how the world ought to be. iii. depend on people's values and cannot be tested
A) i only B) ii only C) iii only D) ii and iii E) i and iii
The additional cost a firm will incur by producing one additional unit of output is the:
A. variable cost. B. marginal cost. C. fixed cost. D. total cost.
Provide a brief overview of the Mundel-Fleming macroeconomic model of an open economy.
What will be an ideal response?