The crowding-out effect is
A. only relevant when an inflationary gap is present.
B. a situation in which expansionary fiscal policy leads to a decrease in planned spending in the private sector.
C. due to the upward slope of the SRAS when the economy is operating to the right of the LRAS curve.
D. due to the government being more powerful in the markets when there is an increase in government spending.
Answer: B
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Sergio consumes only beef and snails and is maximizing his utility. If the price of beef is less than the price of snails, then we definitely know that
A) Sergio buys more beef than snails. B) Sergio buys more snails than beef. C) the marginal utility from the last pound of beef purchased is greater than the marginal utility from the last pound of snails purchased. D) the marginal utility from the last pound of snails purchased is greater than the marginal utility from the last pound of beef purchased.
Households constitute the demand side of a labor market
a. True b. False Indicate whether the statement is true or false
You lose your job and, as a result, you buy more frozen pizzas. For you, frozen pizza are a(n)
a. luxury good. b. inferior good. c. normal good. d. complementary good.
Covered interest arbitrage involves both
A) the purchase of a foreign asset and a forward contract in the market for foreign exchange. B) the purchase of a domestic asset and a spot contract in the market for foreign exchange. C) the sale of a foreign asset and the purchase of a forward contract in the market for foreign exchange. D) the sale of domestic stocks and the purchase of foreign bonds.