The crowding-out effect of expansionary fiscal policy suggests that:
A. tax increases are paid primarily out of saving and therefore are not an effective fiscal device.
B. increases in government spending financed through borrowing will increase the interest
rate and thereby reduce investment.
C. it is very difficult to have excessive aggregate spending in the U.S. economy.
D. consumer and investment spending always vary inversely.
B. increases in government spending financed through borrowing will increase the interest
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Within the AD/AS model, which one of the following adjustments will cause the economy to return to its long-run capacity when output is temporarily greater than the economy's long-run potential?
a. Lower wage rates and resource prices reduce short-run aggregate supply. b. Lower interest rates increase aggregate demand and, thereby, stimulate output. c. Higher wage rates and resource prices reduce short-run aggregate supply. d. A decrease in prices reduces aggregate demand.
Indians and Indian-Americans have played a pivotal role in powering Silicon Valley's digital revolution. The emigration of talented people from countries like India to countries like the United States is often called:
A. credentialism. B. the brain drain. C. Malthusianism. D. outsourcing.
Total revenue increases if price ________ and demand is ________.
A. rises; inelastic B. falls; inelastic C. falls; unit elastic D. rises; elastic
Refer to the information provided in Figure 4.6 below to answer the question(s) that follow.Equilibrium in this market occurs at the intersection of curves S and D.
Figure 4.6Refer to Figure 4.6. If price goes from equilibrium to P1, producer surplus changes by the area
A. B - F. B. E + F. C. C + E D. E - C.