The enormous budget deficits of 2009 through 2011 meant that the federal government was borrowing upwards of $1.5 trillion per year. If that borrowing had limited the ability of the private sector to get financial capital for its purposes, economists would call this crowding out. There was
A. significant evidence this was a problem because interest rates were very low.
B. little evidence this was a problem because interest rates were very low.
C. significant evidence this was a problem because interest rates were very high.
D. little evidence this was a problem because interest rates were very high.
Answer: B
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When the price of a textbook is $95, the quantity of textbooks supplied is 90 million a year and when the price rises to $105, the quantity of textbooks supplied is 110 million a year. The supply of textbooks is
A) elastic. B) perfectly elastic. C) inelastic. D) perfectly inelastic. E) unit elastic.
If the term structure of interest rates in two countries differ, the differences reflect
A) expected price levels over time. B) expected GDP differences. C) the absence of covered interest arbitrage. D) expected exchange rate changes over time.
In the basic Keynesian model, an increase in transfer payments:
A. reduces short-run equilibrium output. B. increases potential output. C. increases short-run equilibrium output. D. reduces potential output.
Which of the following is typically considered a fixed cost by academic book publishers but a variable cost by companies that print books?
A) postage and supplies B) travel C) rent D) wages and salaries