Answer the following statements true (T) or false (F)
1. Public policy has been ineffective in alleviating the resource misallocation problem in American agriculture.
2. The price and income support programs for agriculture have given the most benefit to those farmers with the most need for the government assistance.
3. Farmers, though a small proportion of the population, can impose a large total cost to taxpayers in the form of agricultural subsidies because the average cost imposed on each individual taxpayer is small and not given much attention by a large number of taxpayers.
4. Agricultural price support programs result in consumers paying lower prices for the product.
5. Domestic farm subsidies improve world trade and contribute to greater efficiency in the international allocation of agricultural resources.
1. T
2. F
3. T
4. F
5. F
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If an economy is characterized by increasing opportunity costs, increasing the production of S by constant amounts results in a constant decrease in the production of T
Indicate whether the statement is true or false
The table gives data on interest rates and investment demand (in billions of dollars) in a hypothetical economy.
Refer to the above table. Using the Id1 schedule, assume that the government needs to finance the public debt and this public borrowing increases the interest rate from 3% to 4%. How much crowding out of private investment will occur?
A. $100 billion
B. $200 billion
C. $600 billion
D. $700 billion