The "crowding-out" effect refers to the fact that
A) fiscal policy cannot be used to shift the IS curve.
B) rising interest rates tend to accompany an expansionary fiscal policy.
C) there may be a liquidity trap.
D) All of these.
B
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By the end of the 1960s, fiscal activism was falling out of favor due to its long ________ lag and, as predicted by the permanent-income hypothesis, the ________ of the 1968 tax surcharge
A) legislative, ineffectiveness B) legislative, overstimulation C) effectiveness, ineffectiveness D) effectiveness, overstimulation
Which of the following is the ultimate goal of monetary policy?
a. Complete removal of income inequality b. Economic growth with price stability c. Free trade d. Balanced budget e. Economic welfare
In the modern world, many developing countries have agricultural economies where the amount of land and other resources is limited. Under these circumstances, rapid population growth ______.
a. should lead to steady economic growth b. leads to innovation and higher standards of living c. threatens sustained economic growth d. discourages nations from adopting free trade
In contrast with perfect competition, excess capacity characterizes monopolistic competition. Excess capacity is due to which of the following?
A) Monopolistically competitive firms face downward-sloping demand curves. In the long run, firms produce where their demand curves are tangent to their long-run average total cost curves. B) Monopolistically competitive firms produce at the minimum point on their average total cost curves. C) Monopolistically competitive markets have low barriers to entry. D) Monopolistically competitive firms produce where marginal revenue is equal to marginal cost.