Businesses may reduce their investment spending following expansionary fiscal policy because:
A. as the economy's growth rate increases, profits rise without the need for new investments.
B. profits fall as expansionary fiscal policy slows the economy.
C. increased government spending will drive up interest rates.
D. the government will take advantage of all the good investment opportunities.
Ans: C. increased government spending will drive up interest rates.
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From an economic perspective, price discrimination is desirable because
A) the increase in profits is more than offset by the loss in consumer surplus, resulting in a net increase in economic surplus. B) it redistributes wealth from wealthy consumers to highly innovative firms. C) it enables firms to increase profits with no loss in economic surplus, and in turn, this could provide firms with incentives to engage in beneficial product innovation. D) the increase in profits results in higher corporate tax revenues received by the government which could be used to subsidize consumption for low-income individuals.
Which one of the following will not cause the production possibilities curve to shift outward?
a. increased education b. the construction of a new factory c. more tractors becoming available to farmers d. All of the above cause the production possibilities curve to shift outward.