The crowding out effect is often associated with
A) a temporary increase in taxes.
B) the reinforcing impact of state and local tax changes on federal tax changes.
C) the impact of a tax rate increase when the aggregate supply function is horizontal.
D) an increase in the interest rate caused by government borrowing.
D
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Using the above figure, which of the following quantities of CDs has the largest deadweight loss?
A) 3 million CDs B) 4 million CDs C) 7 million CDs D) The deadweight losses associated with the three quantities given above are all equal.
All economic questions arise from the fact that resources are unlimited
Indicate whether the statement is true or false
Suppose that the demand for digital streaming devices increases significantly. Which of the following questions would a normative analysis answer?
a. Will a change in price affect the increase in demand? b. Will the increase in demand continue? c. How much should we increase our supply of these devices? d. What will be the likely percent increase in demand next month?
Exhibit 15-4 Coffee and tea output (pounds per hour) CountryCoffee Tea Brazil10 5 China 8 8 As shown in Exhibit 15-4, if each country produced according to its comparative advantage, Brazil would produce:
A. tea and China would produce coffee. B. coffee and China would produce tea. C. both coffee and tea. D. neither coffee nor tea.