Economist A believes that the expansionary fiscal policy --- in the form of increased government spending --- should be implemented to remove the economy from the recessionary gap it is currently in. This economist probably believes that
A) crowding out will not present much of a problem.
B) crowding out will be a big problem.
C) crowding out is irrelevant to the degree of effectiveness of fiscal policy.
D) zero crowding out is unlikely.
E) c and d
A
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Blanca has her choice of either a certain income of $20,000 or a gamble with a 0.5 probability of $10,000 and a 0.5 probability of $30,000. The expected value of the gamble:
A) is less than $20,000. B) is $20,000. C) is greater than $20,000. D) cannot be determined with the information provided.
There are two types of costs associated with production: ____ costs that require monetary payments, and ____ costs that do not
a. implicit; accounting b. accounting; explicit c. implicit; explicit d. explicit; implicit
Matt and Chloe each produce two goods. According to the principle of comparative advantage, the total output produced by these individuals will be greatest
A. if each good is produced by the individual who has the higher absolute cost of producing that good. B. if Matt produces both goods and Chloe produces nothing. C. if each good is produced by the individual who has the lower opportunity cost of producing that good. D. if Chloe produces both goods and Matt produces nothing.
If the Fed purchases government bonds, it
A) decreases bank reserves and the supply of money. B) decreases bank reserves but increases the supply of money. C) increases bank reserves and the supply of money. D) increases bank reserves but decreases the supply of money.