Increases in Government Spending Result in ________ in the Short

question 200

Multiple Choice

Increases in government spending result in ________ in the short run,and permanent increases in government spending result in ________ in the long run.

• A)partial crowding out; partial crowding out
• B)partial crowding out; complete crowding out
• C)complete crowding out; complete crowding out
• D)complete crowding out; partial crowding out

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Definitions:

Close Substitutes

Products or services that can easily replace each other in the eyes of the consumer due to their similar features and functions.

Vertical Demand Curve

A demand curve that is vertical reflects an instance where the quantity demanded does not change in response to changes in price, indicating perfectly inelastic demand.

MR = MC

The optimal point in economic theory where marginal revenue equals marginal cost, leading to the most efficient level of production.

D = ATC

The condition where a firm's demand curve (D) equals its average total cost (ATC), often used in economic models to analyze firm behavior.