The following is an investment schedule. Investment spending is in billions of dollars.
Refer to the data in the table above. Assume that private investment spending is initially $78 billion. If the government finances a deficit and this action increases the interest rate by 2 percentage points, then the government financing would have potentially crowded out:
A. $92 billion of investment spending
B. $17 billion of investment spending
C. $78 billion of investment spending
D. $14 billion of investment spending
B. $17 billion of investment spending
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Private ownership of a monopoly may benefit society because the monopoly will have an incentive to
a. charge a price that is consistent with that of a benevolent social planner. b. charge a price that prevents some people from buying. c. price its good according to the intersection of marginal cost and average revenue. d. lower its costs to earn a higher profit.
Which of the following is determined by dividing the firm's total costs by the quantity of its output?
a. Implicit cost b. Fixed cost c. Variable cost d. Average cost