There will be no crowding-out effect when the government increases spending and the planned investment schedule (curve) is
A) vertical.
B) downward sloping.
C) upward sloping.
D) horizontal.
Answer: A) vertical.
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In the above figure, if the budget line shifts from RT to RS, the substitution effect is illustrated by the move from
A) a to b. B) a to c. C) b to c. D) T to S.
Describe the situation of the Japanese economy in the 1990s. What should the Japanese government have done differently, according to critics, to improve the economy?
What will be an ideal response?
A monopolistic firm operates in two separate markets. No trade is possible between market A and market B. The firm has calculated the demand functions for each market as follows:
Market A p = 15 - Q; Market B p = 11 - Q The company estimates its total cost function to be TC = 4Q. Calculate: a. quantity, total revenue and profit when the company maximizes its profit and charges the same price in both markets b. quantity, total revenue and profit when the company charges different prices in each market and maximizes its total profit
In an open economy net exports must always be positive
a. True b. False Indicate whether the statement is true or false