In the 1980s, expansionary fiscal policy is believed to have crowded out
A) domestic investment as interest rates rose.
B) exports and imports as interest rates rose.
C) exports but not domestic investment as interest rates rose.
D) domestic investment as interest rates fell.
C
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When crowding out occurs in an economy, it can reduce expenditures for
A. business investments. B. both consumer purchases and business investments. C. consumer purchases. D. government purchases.
If all consumers are price-takers facing the same prices, then their budget lines will all have the same slope.
Answer the following statement true (T) or false (F)
A $10 per-unit tax on cell phones raises the equilibrium price paid by consumers by $5. Before the tax, 5,000 cell phones were sold per year. The revenue from the tax is
A) zero. B) positive but less than $50,000 per year. C) $50,000 per year. D) more than $50,000 per year.
A price ceiling that is set below the equilibrium price
A) causes suppliers to raise their prices. B) is binding. C) is non-binding. D) creates a surplus.