The crowding out effect refers to
A. the reinforcing impact of state and local tax changes on federal tax changes.
B. an increase in the interest rate caused by government borrowing.
C. a permanent increase in taxes.
D. the impact of a tax rate increase when the aggregate supply function is horizontal.
Answer: B
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Retailers and other middlemen provide benefits to patrons
A) because people don't realize how much they could save by cutting out middlemen. B) but the middlemen benefit far more. C) by lowering the cost to their customers of acquiring valuable information. D) only because their customers are irrational.
Which of the following appears on the asset side of a bank's balance sheet?
a. Excess reserves. b. Loans. c. Required reserves. d. All of the above.
If the central bank increases the money supply, then in the short run prices
a. rise and unemployment falls. b. fall and unemployment rises. c. and unemployment rise. d. and unemployment fall.
Movement along the curve from point A to point B represents a change in ______ in response to price level changes.
a. wages
b. output
c. input
d. rents