The crowding-out effect suggests that government borrowing to finance a deficit will cause
A. an increase in interest rates and a reduction in investment.
B. an increase in corporate and personal income tax rates.
C. a decrease in government spending on Social Security.
D. an increase in consumer spending.
A. an increase in interest rates and a reduction in investment.
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In September 2008, the MONTHLY rate of inflation in Zimbabwe approached 489 BILLION percent. An inflation rate such as this would
A) be too high to calculate using the CPI. B) decrease the natural rate of unemployment. C) seriously disrupt normal commerce. D) all of the above.
When the government eliminated Regulation Q in the 1980s, allowing S&Ls to raise interest rates in order to keep their depositors from switching their deposits to competing investment houses, many S&Ls were doomed because
a. they were locked into fixed, long-term mortgage loans at rates often lower than what they paid depositors, forcing them into more risky but higher interest-yielding loanventures b. they refused to finance (loan) speculative land development projects at a time when land values were skyrocketing, losing the opportunity to recoup losses caused by theelimination of Regulation Q c. they ventured abroad, mainly to the Middle East, for prospective borrowers and fell victim to the political instability of those ventures d. the Federal Reserve also raised interest rates, causing a general slowdown in the economy, which eventually affected S&L profitability e. member savings and loans quit the FSLIC in protest of the new rules
Average revenue is equal to
a. TR/Q. b. (P × Q)/P. c. TR × Q d. All of the above are correct.
A severe hurricane hits Florida, destroying large amounts of the citrus crop. What is the most likely effect of this on aggregate supply?
a. It will be unchanged. b. No effect, the economy will move along the curve to a higher price level. c. No effect, the economy will move along the curve to a lower price level. d. It will increase. e. It will decrease.