The "crowding out" effect refers to the:
A. increase in domestic investment by foreigners, leaving little investment choice for domestic investors.
B. reduction in the interest rate caused by governments running a deficit.
C. reduction in domestic investment caused by governments running a deficit.
D. irrational exuberance of the market reducing the number of rational investments available.
C. reduction in domestic investment caused by governments running a deficit.
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If people posing as a vacationers were able to purchase large numbers of airline tickets from the airlines and later resell them to business travelers
A) group price discrimination on the part of airlines would no longer be profitable. B) group price discrimination on the part of airlines would no longer be profit maximizing. C) the airlines would respond by raising further the price charged to business flyers. D) the people reselling would not earn any economic profit.
The Federal Reserve can tightly control
a. cash in the hands of the public b. cash in the hands of the public and demand deposits c. demand deposits d. funds in savings accounts and checking accounts e. borrowing by the government
A substantial decrease in marginal tax rates will encourage individuals to
a. increase their earnings and work effort. b. save a smaller portion of their income. c. take more time off for vacations. d. spend more on tax-deductible items.
The central difference between the structural stagnation hypothesis and the secular stagnation theory is that:
A. structural stagnation applied in the 1940s, and secular stagnation applies today. B. structural stagnation focuses on globalization, while secular stagnation focuses on declining investment. C. structural stagnation focuses on declining investment, while secular stagnation focuses on globalization. D. structural stagnation is a hypothesis, while secular stagnation is a theory.