Among the following cases, the opportunity cost of crowding out is the smallest when the government spends dollars:
a. staffing the Internal Revenue Service hotline
b. printing stationery for new members of Congress.
c. placing photographs of the new President in government and diplomatic offices worldwide.
d. on Social Security benefits.
e. on new interstate highways.
e
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Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the
Three-Sector-Model? a. The GDP Price Index rises, and nominal value of the domestic currency falls. b. The GDP Price Index falls, and nominal value of the domestic currency rises. c. The GDP Price Index falls, and nominal value of the domestic currency falls. d. There is not enough information to determine what happens to these two macroeconomic variables. e. The GDP Price Index rises, and nominal value of the domestic currency remains the same.
When a good is not excludable but is rival in consumption the:
A. free rider problem may arise. B. tragedy of the commons may arise. C. good is likely a private good. D. good is likely a common resource.