According to the crowding-out view, budget deficits will:
A. reduce interest rates.
B. increase interest rates and retard private investment.
C. reduce the investments of foreigners in the United States.
D. increase the capital stock available to future generations.
Answer: B
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Refer to Exhibit 10-3. When disposable income equals $2,300, saving equals
a. -$20. b. -$10. c. 0. d. $10. e. $20.
Sweet Husks is a perfectly competitive corn farm. Currently, the expected price of an ear of corn is $0.20 and, at its current production level, Sweet Husks has a marginal cost of $.20 per ear. Which of the following is true regarding Sweet Husks?
A) To maximize expected profit, Sweet Husks should increase production. B) To maximize expected profit, Sweet Husks should decrease production. C) To maximize expected profit, Sweet Husks should double production. D) Sweet Husks is maximizing expected profit.
The isoquants for inputs that are perfect substitutes for one another consist of a series of:
a. right angles b. parallel lines c. concentric circles d. right triangles e. none of the above
Is increased production of a good beneficial to society?
A. Yes, because scarcity is such an overriding concern. B. Yes, because more is always better. C. Maybe, it depends on what is foregone. D. No, because increased production does not increase utility.