Crowding in can be defined as
a. an increase in the budget deficit increases demand so that investment increases.
b. tax incentives on investment encourage capital formation, an increase in aggregate supply.
c. consumption rises in a recovery, which increases demand for investment.
d. the budget deficit falls enough to lower interest rates to stimulate investment.
a
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If the government assigns private property rights to a common resource, then the
A) resource is under-utilized. B) marginal private cost becomes equal to the marginal social cost. C) government needs to set a quota to achieve efficiency. D) None of the above answers is correct.
An important feature of the DMP model is that
A) would-be workers care not just about the market wage, but about the chances of finding work. B) firms can fire workers. C) workers can choose to shirk on the job. D) firms maximize revenue.
"Discouraged" workers are counted as "unemployed."
Indicate whether the statement is true or false
Labor costs usually increase at an increasing rate at high levels of output for all of the following reasons except
a. labor productivity begins to decline b. the marginal gains from specialization decrease c. the price of labor rises as more workers are hired d. the workers hired later may not be as qualified e. fuel costs begin to increase as more output is produced