Which of the following statements about crowding out is true?
a. It can completely offset the multiplier.
b. It is caused by a budget deficit.
c. It is not caused by a budget surplus.
d. All of these are true.
d
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We can draw demand curves for firms in perfectly competitive and monopolistically competitive industries, but not for oligopoly firms. The reason for this is
A) perfectly competitive and monopolistically competitive firms sell standardized products. Oligopoly firms sell differentiated products. B) there are no barriers to entry in perfectly competitive and monopolistically competitive industries. There are high barriers to entry in oligopoly industries. C) we can assume that the prices charged by perfectly competitive and monopolistically competitive firms have no impact on rival firms. For oligopoly this assumption is unrealistic. D) that perfectly competitive and monopolistically competitive firms are price takers. Oligopoly firms are price makers.
Which of the following is most likely to be TRUE?
A) Income elasticity of demand for fur coats exceeds that of oatmeal. B) Income elasticity of demand for oatmeal exceeds that of fur coats. C) Income elasticity of demand for fur coats equals that of oatmeal. D) It is not possible to make any prediction about relative income elasticities.