Which of the following will be most likely to dampen the expansionary effects of an increase in government spending financed by borrowing?
a. The budget deficit will cause business decision makers to become more optimistic.
b. The increase in demand for loanable funds as the result of borrowing will cause interest rates to rise and private investment to fall.
c. The increase in government spending will cause the money supply to expand, thereby causing an inflationary boom.
d. The additional borrowing will cause the central bank to buy more bonds, which will reduce aggregate demand.
B
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Which of the following is part of Keynesian economic theory?
a. total output adjusts to aggregate expenditure b. the aggregate supply curve is horizontal c. businesses adjust their level of output to meet the demand for output d. All of these.
How is it possible for output to be greater than potential GDP?
What will be an ideal response?
In the perfectly competitive market, all firms in the market are assumed to be producing:
A. identical products. B. differentiated products. C. products that are heavily advertised. D. complementary products.
Recall the Application about genetic testing and adverse selection to answer the following question(s).According to the Application, what is causing more and more consumers to get a complete genetic profile of themselves?
A. The cost of genetic testing is decreasing. B. The government is subsidizing genetic testing through Medicare. C. More employers are requiring genetic testing before workers are hired. D. More people want to know which famous person they are related to.