According to Figure 12.1, if the economy moves from point C to point A because of increased government spending, the amount of private spending crowded out is equal to the distance
A. BD.
B. BC.
C. AB.
D. AC.
Answer: B
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If all income is consumed in a year, then
A) income next year will increase. B) investment spending will be zero. C) any investment spending will be done by the government. D) investment spending will increase.
Using the market for loanable funds, which of the following has the potential to raise the real interest rate?
A) an increase in the supply of loanable funds B) an increase in the quantity of loanable funds demanded C) an increase in the quantity of loanable funds supplied D) an increase in the demand for loanable funds
Open market operations affect the supply of reserves
a. True b. False Indicate whether the statement is true or false
Firms that use a price-matching strategy attempt to keep price at:
A. the oligopoly price or the monopoly price. B. the monopoly price. C. marginal cost. D. the oligopoly price.