8. Which of the following is the best example of Crowding out? The US government spends more (G increases), therefore they must increase taxes. O If US Gincreases, interest rates fall, thereby causing business investment, I, to increase. If US government spending on libraries increases, reading will become more popular, and people then will spend more on books. O H US G increases and this is financed through borrowing from foreign lenders, this tends to cause an appreciation of the $. In turn this causes exports to decrease in the short run. None of the other options

8. Which of the following is the best example of Crowding out? The US government spends more (G increases), therefore they must increase taxes. O If US Gincreases, interest rates fall, thereby causing business investment, I, to increase. If US government spending on libraries increases, reading will become more popular, and people then will spend more on books. O H US G increases and this is financed through borrowing from foreign lenders, this tends to cause an appreciation of the $. In turn this causes exports to decrease in the short run. None of the other options

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose there were an increase in Government spending of $100 billion. The MPC is 75 andthe tax rate is 2. No. imports a. What is the net impact on the economy if the crowding out effect is equal to $20 billion?b. What if the crowding out effect is $60 billion7c. Which of the two scenarios corresponds to the reaction of an economy which is closer to fullemployment? Explain
1. A college wants to produce an effigy for the student carnival. Preliminary studiesmade it possible to establish that the production of these effigies requires fixed costs of $2,008and variable costs (materials, labor, energy) of $0.90 per effigy. One of therequirements of the college being not to make a deficit, he had a market study carried out.It appears from this study that by selling these effigies for $3.75 we can hope to sell them1,000, whereas by setting the price at $2.50, the potential sales are 3,000.a) Express the demand in terms of the selling price and representgraphically this function.b) Express the cost of production as a function of the selling price.c) Express the income in terms of the selling price and determine the price that thecollege should fix to maximize the income from this sale of effigies.d) Represent the income function and the cost function on the same system of axesand determine the prices corresponding to the break-even thresholds and numbereffigies…
aget TRUE - OR - FALSE The amount the government owes to the public is the deficit. O True O False
Consider the following picture. c' A D B E F Suppose that the government changes government spending: it increases G and decreases G', but leaves T and T' unchanged. The interest rates in the economy are also unchanged. What happens to the budget line of the consumer? O It expands to the right: the consumer will be able to consume more in the present, and less in the future It contracts to the left: the consumer will be able to consume less in the present, and more in the future O It's unchanged O Impossible to tell!
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6. Use the following table to answer these questions: Y C I G X $ 500 $ 500 $ 10 $ 20 $ 60 $ 600 $ 590 $ 10 $ 20 $ 40 $ 700 $ 680 $ 10 $ 20 $ 20 $ 800 $ 770 $ 10 $ 20 $ 0 $ 900 $ 860 $ 10 $ 20 - $ 20 $ 1,000 $ 950 $ 10 $ 20 - $ 40 a.What is the Marginal Propensity to Import? b.What is the Marginal Propensity to Invetst? c.What the difference between both of…