Which of the following best describes the crowding-out effect?
a. An increase in government expenditures will cause taxes to rise, which will reduce both aggregate demand and output.
b. An increase in borrowing by the government will push interest rates upward, which will lead to a reduction in private spending.
c. An increase in borrowing by the government will decrease the money supply and, thereby, reduce aggregate demand.
d. An increase in government expenditures will cause the general level of prices to fall and, thereby, reduce aggregate demand and output.
B
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Some grocery stores are now offering customers coupons which entitle them to a discount on certain items on their next visit when they go through the check-out line. This practice is an example of:
A) intertemporal price discrimination. B) third-degree price discrimination. C) a two-part tariff. D) bundling. E) none of the above
Federal tax loopholes in personal income tax provide benefits only to very high-income people
a. True b. False Indicate whether the statement is true or false
All else equal, what is the impact of an increase in the price of feed on fed cattle markets?
A. Decrease in the price and decrease in the quantity of fed cattle. B. Decrease in the price and increase in the quantity of fed cattle. C. Increase in the price and decrease in the quantity of fed cattle. D. Increase in the price and increase in the quantity of fed cattle.
If excess reserves in the banking system are $4,000, checkable deposits are $40,000, and the legal reserve ratio is 10 percent, then actual reserves are:
A. $6,000. B. $8,000. C. $5,000. D. $4,000.