With complete crowding out, an increase in government spending
A) is completely offset by a reduction in private spending.
B) is matched by an increase in private spending.
C) results in an increase in aggregate supply.
D) results in an increase in aggregate demand.
A
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The concept of scarcity indicates that:
A) most goods have no alternative uses. B) almost all goods have alternative uses. C) most decisions can be made without sacrificing alternatives. D) certain societies are able to overcome the constraints imposed by alternative uses of resources.
Steve and Craig have been shipwrecked on a deserted island in the South Pacific. Their economic activity consists of either gathering pineapples or fishing. Steve can catch 4 fish in 1 hour or harvest 2 baskets of pineapples. At the same time, Craig can
reel in 2 fish or harvest 2 baskets of pineapples. If they each spend four hours a day fishing and four hours a day harvesting pineapples, what will their total production be? If Steve only catches fishes and Craig only harvests pineapples, how will total production change?