In the classical model with an open economy, an increase in government purchases may not cause complete crowding out, but crowding out will be complete worldwide
a. True
b. False
A
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Subsidizing firms that pollute will reduce pollution in the long run.
Answer the following statement true (T) or false (F)
In the vertical segment of the aggregate supply curve,
a. different levels of GDP correspond with high unemployment. b. competition among producers for already-employed resources can succeed only in lowering the economy's price level. c. full employment is achieved. d. producers are able to hire more workers at lower wages. e. increases in GDP are due solely to production gains.
Economic profits will take into account: a. explicit costs but not implicit costs. b. implicit costs but not explicit costs. c. both implicit and explicit costs
d. neither explicit nor implicit costs.
When the government runs a deficit it must:
A. buy bonds to finance the deficit. B. decrease the money supply to finance the deficit. C. raise taxes immediately. D. sell bonds to finance the deficit.