An increase in our federal government's budget deficit will likely:
a. increase the national debt.
b. increase interest rates.
c. be less effective in stimulating the economy than the spending multiplier implies because of crowding out.
d. decrease borrowing by households and businesses.
e. All of the answers are correct.
e
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Assume that the market clearing price for a shirt is $20, but that the maximum price that can be charged is $15. This is an example of
A) a price control that will lead to a surplus of shirts on the market. B) a price floor that will lead to a shortage of shirts on the market. C) markets failing to ration a fixed quantity of a good. D) a price ceiling that will likely lead to a shortage of shirts on the market.
In the long run, monopolistically competitive firms produce where demand equals marginal cost
a. True b. False Indicate whether the statement is true or false