.Which of the following best describes the crowding-out effect?
What will be an ideal response?
An increase in borrowing by the government will push interest rates upward, which will lead to a reduction in private spending.
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Complementary goods are goods:
a. that are consumed jointly. b. that are consumed one in place of the other. c. for which demand increases when the price of its complementary goods increases. d. for which demand decreases when the price of its complementary goods decreases. e. that are inversely related.
Catering to special interest lobbying may distort the government's provision of public goods away from the social optimum
Indicate whether the statement is true or false
In contrast to the United States, the European Union has chosen
a. greater wage inequality for lower unemployment. b. less wage inequality and lower unemployment. c. greater wage inequality and higher unemployment. d. similar wage inequality but more unemployment. e. less wage inequality for higher unemployment.
Suppose a firm uses 200 units of capital and 1,000 workers to produce 10,000 units of output. When the firm employs 3,000 workers and uses 600 units of capital, output increases to 45,000 units. This firm exhibits:
A. increasing returns to scale. B. decreasing returns to scale. C. constant returns to scale. D. diminishing marginal returns.