If the crowding-out effect is strong, how will the potency of discretionary fiscal policy be affected?
a. It will make fiscal policy more potent.
b. It will make fiscal policy less potent.
c. The potency of fiscal policy will be unaffected.
d. The potency of expansionary fiscal policy will be reduced, but that of restrictive fiscal policy will be enhanced.
B
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If a small country imposes a tariff, then
A) the producers must suffer a loss. B) the consumers must suffer a loss. C) the government revenue must suffer a loss. D) the demand curve must shift to the left. E) the world price on that item will shift.
Which of the following is NOT a difficulty with using a piece-rate contract?
A) measuring output B) eliciting the desired behavior C) gaining worker acceptance D) workers taking too much time to achieve a certain task
Both the multiplier effect and the investment accelerator tend to make the aggregate-demand curve shift further than it does due to an initial increase in government expenditures
a. True b. False Indicate whether the statement is true or false
A $2,000 decrease in investment will shift the aggregate expenditures curve down by:
A. exactly $2,000 and will decrease the equilibrium level of real GDP by exactly $2,000. B. exactly $2,000 and will decrease the equilibrium level of real GDP by less than $2,000. C. exactly $2,000 and will decrease the equilibrium level of real GDP by more than $2,000. D. less than $2,000 and will decrease the equilibrium level of real GDP by less than $2,000.