The crowding-out effect refers to the tendency of expansionary fiscal policy to
A) cause decreases in planned investment or planned consumption.
B) cause households to save less.
C) replace low-skilled labor with higher-skilled labor.
D) cause firms to produce beyond capacity.
A
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Pizza is a normal good if the demand a. for pizza rises when income rises
b. for pizza rises when the price of pizza falls. c. curve for pizza slopes upward. d. curve for pizza shifts to the right when the price of burritos rises, assuming pizza and burritos are substitutes.
Contrast the economic performance of the American economy of 2001 with the economic performance of the 1996 to 2001 period. Use the appropriate aggregate demand and aggregate supply curves to distinguish the differing economic condition of the two periods.
What will be an ideal response?
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.
If two workers can produce 22 units of output, and the addition of a third worker increases output to 30 units, the marginal product of the third worker is:
A. 8 units. B. 10 units. C. 22 units. D. 30 units.