Which of the following is an explicit cost production?
A. the electric bill
B. wages paid to workers
C. purchases of raw material
D. Only answers A and B are explicit costs because the purchases of raw material is only an opportunity cost.
E. Answers A, B, and C are all
Answer: E. Answers A, B, and C are all
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Crowding out occurs when:
a. an increase in private spending results in a decrease in government deficit. b. an increase in private spending results in an increase in government deficit. c. government deficit spending results in less private spending d. government deficit spending results in more private spending.
The figure below shows an IS-LM-FE model for an economy with fixed exchange rates. Initially the economy was at Point A, a triple intersection. Here, the FE curve is flatter than the LM curve.
To defend the fixed exchange rate, at Point B the country's monetary authority must
A. sell domestic currency. B. buy domestic currency. C. sell foreign government bonds. D. buy domestic government bonds.