The crowding-out effect is
A) the tendency of expansionary fiscal policy to cause an increase in planned investment but not in planned consumption in the U.S. private sector.
B) the tendency of contractionary fiscal policy to cause an increase in planned investment but a decrease in planned consumption in the U.S. private sector.
C) the tendency of expansionary fiscal policy to cause a decrease in planned investment or planned consumption in the U.S. private sector.
D) the tendency of contractionary fiscal policy to cause an increase in planned investment or planned consumption in the U.S. private sector.
C
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Suppose in Finland a worker can produce either 32 cell phones or 4 kayaks while in Canada a worker can produce either 40 cell phones or 10 kayaks
a. Which country has an absolute advantage in cell phone production? In kayak production? b. What is the opportunity cost of 1 cell phone in Finland? In Canada? c. What is the opportunity cost of 1 kayak in Finland? In Canada? d. Which country has a comparative advantage in cell phone production? In kayak production? e. Suppose each country has 1,000 workers. Currently, each country devotes 40 percent of its labor force to cell phone production and 60 percent to kayak production. What is the output of cell phones and kayaks for each country and what is the total output of cell phones and kayaks between the two countries? f. Suppose each country specializes in the production of the good in which it has a comparative advantage. What is the total output of cell phones and kayaks in the two countries? g. Provide a numerical example to show how Finland and Canada can both gain from trade. Assume that the terms of trade are established at 6 cell phones for 1 kayak.
The value of goods produced by coalition A is worth $50, and by coalition B is worth $30 . If together they produce $100 of them, the game is called superadditive
Indicate whether the statement is true or false
The level of detail in an economic model
a. is as close as possible to the level of detail in reality b. depends on the purpose of the model c. is as complex as possible d. is the same regardless of the purpose of the model e. is as complex as possible to accomplish its purpose
According to the law of diminishing returns, if population grows, but the amount of available resources stays the same, output will ______.
a. fall at an inverse rate b. stay the same c. rise, but by ever shrinking amounts d. rise at a steady rate