If a new home can be constructed for $150,000, what is the opportunity cost of federal defense spending, measured in terms of private housing? (Assume a defense budget of $700 billion.)

Everything else held constant, changes in the interest rate affect planned investment spending and hence the equilibrium level of output, but this change in investment spending

A) merely causes a movement along the IS curve and not a shift. B) is crowded out by higher taxes. C) is crowded out by higher government spending. D) is crowded out by lower consumer expenditures.

Suppose that a $5.50 price floor is imposed on a corn market whose equilibrium price was $4.50 per bushel. Which of the following will happen?

a. There will be an excess demand of corn at $5.50. b. The profits of all corn farmers will increase by $1 per bushel. c. There will be an excess supply of corn at $5.50. d. The equilibrium price of corn will fall below $4.50 per bushel. e. The excess supply at $5.50 will fall to zero as the equilibrium price increases to $5.50 .