Did the Large U

question 204

Multiple Choice

Did the large U.S.budget deficits in the 1980s "crowd out" investment as some economists had predicted?

• A)Yes, investment dropped as predicted.
• B)Yes, although investment did not fall nearly as much as some had feared.
• C)No, investment was not crowded out, but net exports dropped.
• D)No, no crowding out at all occurred.

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Definitions:

Competitive Firm

A business that competes in a market where it has some influence on the prices of its products or services but faces competition from other firms.

Total Economic

A term likely intending to refer to 'total economic value,' which encompasses all direct and indirect values of a resource or entity.

ATC Curves

Graphs that illustrate the average total cost of production at different levels of output.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the profitability of a firm beyond normal profit levels.