Which of the following occurs when investment is crowded out by government spending?
A) interest rates fall
B) the amount of borrowing by the government falls
C) the amount of government debt rises
D) consumption increases
Ans: C) the amount of government debt rises
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Adam Smith argued that each person in a competitive market is led to promote the
A) efficient use of society's resources, because each person's intention is to make society better off. B) efficient use of society's resources, even though it is no person's intention to make society better off. C) inefficient use of society's resources, even though each person's intention is to make society better off. D) inefficient use of society's resources, because it is no person's intention to make society better off.
The chances of successful collusion are greatest when
a. firms are producing a differentiated product b. there are many firms in the industry c. there are tiny firms and huge firms together in the same industry d. demand curves and cost curves are similar among the firms in the industry e. demand is falling