Crowding out can occur when a government budget ________ raises the real interest rate and the equilibrium quantity of investment ________
A) surplus; increases
B) deficit; increases
C) surplus; decreases
D) surplus; does not change
E) deficit; decreases
E
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In order to be classified as a recession, a contraction of general economic activity must last at least
A) one year. B) six months. C) one period. D) one quarter. E) None of the above because recessions do not have a minimum length.
A surprising outcome of the Rock-Paper-Scissors game is that
A) it is a clear example of a first mover advantage. B) there is no pure-strategy Nash equilibrium. C) it is best not to play the game. D) it is a good way to determine who goes first in a sequential move game.
The elasticity of supply is defined as the ____ change in quantity supplied divided by the ____ change in price
a. total; percentage b. percentage; marginal c. marginal; percentage d. percentage; percentage
If the consumer sentiment index turns down sharply over a period of several months, which of the following is most likely to occur in the near future?
a. an increase in aggregate demand and expansion in real output b. a reduction in aggregate demand and a contraction in real output c. a reduction in aggregate demand and expansion in real output d. an increase in aggregate demand and a contraction in real output