The crowding-out effect refers to the possibility that an
a. increase in the money supply will result in a decline in taxes.
b. increase in consumption spending will crowd out government spending.
c. increase in private savings will crowd out the taxable income of households.
d. increase in government borrowing will result in higher interest rates, which will crowd out private investment and consumption.
D
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Why is a small country more likely to gain from international trade than a large country?
a. Because autarkic relative prices in a small country are likely to be quite different from the world relative prices. b. Because a small country, unlike a large country, does not have the resources it needs to be self-sufficient. c. Because small countries tend to be specialized in their production, while large countries tend to be diversified. d. Because a small country is less likely to encounter decreasing returns to scale than is a large country.
Ceteris paribus, if bond prices rise, then
A) there is no effect on bond yields. B) bond yields will increase as well. C) bond yields will fall D) the Federal reserve must be pursuing contractionary monetary policy.
Classical economists believe that ________
A) it takes a long time for economic variables to reach equilibrium B) short-run fluctuations are too infrequent and mild to be of much interest C) real variables like output and investment are not determined by nominal variables D) all of the above E) none of the above
The above table shows answers given by people interviewed in a government survey of households. Which individual or individuals are considered marginally attached?
A) A B) B, C, and D C) A and D D) D