When contractionary fiscal policy leads to
A) less private investment because of higher interest rates, the change in investment is called crowding in by economists.
B) more private investment because of lower interest rates, the change in investment is called crowding in by economists.
C) less private investment because of lower interest rates, the change in investment is called crowding in by economists.
D) less private investment because of higher interest rates, the change in investment is called crowding out by economists.
Ans: B) more private investment because of lower interest rates, the change in investment is called crowding in by economists.
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The fact that the long-run Phillips curve is vertical implies that
A) monetary policy can't affect unemployment. B) money is neutral in the long run. C) there is a natural rate of inflation. D) money can't affect inflation in the long run.
The Clinton administration has recommended an increase in the tax on yachts to help pay for government programs. Which of the following is true?
A) The burden of this tax will fall entirely on yacht consumers. B) The burden of this tax will fall entirely on yacht manufacturers. C) The sales of yachts will decrease. D) The profit of yacht manufacturers will increase. E) Employment of workers in the yacht industry will increase.