Accumulating debt poses a problem for the U.S. federal government because
A) it is currently in danger of defaulting on the debt.
B) a large debt-to-GDP ratio causes crowding out.
C) building roads and bridges do not yield enough benefits to justify their cost.
D) the debt has to ultimately be paid off.
Answer: B
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In the model of monopolistic competition, an increase in industry output will cause individual firms' demand curves to become ________, which will ________ demand for higher-priced goods and ________ demand for lower-priced goods
A) flatter; reduce; increase B) steeper; reduce; increase C) flatter; increase; reduce D) steeper; increase; reduce E) horizontal; reduce; reduce
Assume the economy is operating at a real GDP above full-employment real GDP. Classical economists would prescribe which of the following policies?
A. nonintervention B. active monetary policy C. contractionary D. expansionary