Crowding out occurs when the federal government:
a. raises taxes to finance a budget deficit.
b. refinances maturing U.S. Treasury bonds.
c. borrows by selling bonds to finance a deficit.
d. uses a budget surplus to pay off part of the national debt.
c
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Purchasing power parity (PPP) measurements of income are a way to make international comparisons by correcting for national differences in
A) unemployment. B) inflation. C) prices of goods and services. D) economic growth. E) government subsidies.
Advocates of stabilization policy prefer quick medicine for economic ills. This leads some observers to favor fiscal policy while others endorse monetary policy. Describe the positions of each side in the debate and what seems to be the current consensus
When price is $6
A. there is a surplus.
B. there is a shortage.
C. there is both a surplus and a shortage.
D. there is neither a surplus nor a shortage.
Suppose that a firm's legal staff concludes that a new production process that the firm is developing is patentable. Graphically, this new information would shift the firm's expected-rate- of-return curve on R&D to the:
A. right and reduce its optimal amount of R&D. B. right and increase its optimal amount of R&D. C. left and increase its optimal amount of R&D. D. left and reduce its optimal amount of R&D.