Which of the following does the crowding-out effect stress?
What will be an ideal response?
Additional government borrowing to finance a larger deficit will increase the demand for loanable funds, causing real interest rates to rise.
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The "tragedy of the commons" refers to
a) farmers who allow their livestock to overgraze their fields b) the acceptance of deplorable working conditions by those who lack the human capital to obtain a better job c) the absence of incentives to prevent the overuse and depletion of a commonly used resource d) the tendency for bureaucrats to maximize their budget
The money-stock target is preferable when uncertainty is the result of unpredictable shifts in which of the following?
a. expectations in future profitability b. Residential construction investment c. the money multiplier d. Both a and b e. All of the above