Crowding out occurs when the government
a. reduces the level of the national debt, forcing up interest rates
b. balances the budget, increasing the value of government bonds and thereby causing consumption to fall
c. borrows money to finance the national debt, forcing up interest rates, causing private investment to fall
d. borrows money to finance the national debt, causing interest rates to fall causing private investment to fall
e. borrows money to finance the national debt, forcing up interest rates, causing consumption to fall
C
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What will be an ideal response?
Jerry is studying three nights per week and his grade point average is 3.1. He wants a higher GPA and decides to study an extra night each week. His GPA now rises to 3.5
Had Jerry not decided to study an extra night, he would have spent this night with his friends. What is Jerry's marginal benefit from studying for one additional night a week? What is his marginal cost of increasing the study time by one night per week? Why does Jerry decide to study an extra night?