When crowding out occurs in an economy, it can reduce expenditures for
A. business investments.
B. both consumer purchases and business investments.
C. consumer purchases.
D. government purchases.
Ans: B. both consumer purchases and business investments.
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Which of the following shifts the aggregate supply curve rightward? i. The money wage rate rises. ii. Potential GDP increases. iii. Government expenditure on goods and services increases
A) i only B) ii only C) iii only D) ii and iii E) i, ii, and iii
Assuming relative PPP, fill in the table below:
What will be an ideal response?
A firm uses two inputs, labor (L) and capital (K) in the production of umbrellas. It can invest $50,000 in the purchase of the two inputs annually. The firm hires 5 units of capital at $1,000 per unit. If the going annual wage rate is $4,500, calculate the number of workers employed by the firm. (Assume that the firm spends the entire budget on K and L.)
a. 10 b. 5 c. 15 d. 9
Which would help resolve structural stagnation?
A. Productivity rises B. Productivity falls C. Domestic exchange rates rise D. Domestic wages rise