Crowding out occurs when the federal government:
A. raises taxes to finance a budget deficit.
B. refinances maturing U.S. Treasury bonds.
C. borrows by selling bonds to finance a deficit.
D. uses a budget surplus to pay off part of the national debt.
Answer: C
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In the above figure, if a subsidy is granted to producers that generates an efficient allocation of resources, then consumers will pay a price of
A) $20 per unit. B) $15 per unit. C) $10 per unit. D) $5 per unit.
A bank's largest liability is its
A) shareholder equity. B) long-term debt. C) short-term borrowing. D) deposits of its customers.
If the price of $1 is 1.67 Swiss francs, the price of a Swiss franc is
A) $0.33. B) $1.67. C) $2.00. D) $0.67.
Refer to Figure 7-1. Under autarky, the consumer surplus is area
A) S + V. B) S. C) R. D) R + S + V.