Which would tend to reduce the crowding-out effect that occurs when the federal government increases its borrowing to finance a deficit?
A. The expenditures fail to contribute to the development of human capital.
B. The deficit financing reduces the profit expectations of business firms.
C. The economy is operating at full employment.
D. The economy is operating at less than full employment.
Answer: D
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Which of the following is not an example of a noncooperative oligopoly model?
A) The kinked demand curve model. B) The model of limit pricing. C) The prisoner's dilemma game. D) The cartel model.
The major limitation of both the Keynesian approach and the monetarist approach is that both
a. focus on the determination of interest rates to the exclusion of price levels. b. study the determination of real GDP equilibrium without including the price level. c. are ways of studying the aggregate demand curve, but to learn anything about the price level and output, the aggregate supply curve must be included in the analysis. d. concentrate on interest rates without considering changes in consumption or net exports.
The proportion of the total population aged 0–15 and over 65, is known as the
(a) dependency burden. (b) unproductive population. (c) surplus labor. (d) population momentum.
Which of the following is not a component of the aggregate expenditures of a country?
a. Investment b. Government spending c. Net exports d. Consumption e. Transfer payments