The concept that increased government spending will lead to lower investment and consumer spending is referred to as the
A) inflationary effect.
B) crowding-out effect.
C) aggregate demand effect.
D) Keynesian effect.
B
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Figure 3-4
Which of the following would make point Q in Figure 3-4 attainable?
A. Full-employment policies B. A technological advance strictly applicable to the production of apples C. An increase in land available for agricultural use D. A transfer of available resources from apples to wheat production
Changes in the quality of some goods and services, such as electromechanical calculators, are thought to give a downward bias to the consumer price index
a. True b. False Indicate whether the statement is true or false
Long-run macroeconomic equilibrium occurs when
A) the aggregate demand curve intersects the short-run aggregate supply curve. B) the aggregate demand and short-run aggregate supply curves intersect at a point on the long-run aggregate supply curve. C) structural and frictional unemployment equal zero. D) output is above potential GDP.
The real business cycle model focuses on how
A) wage and price stickiness explains fluctuations in real GDP. B) the labor theory of value is the best measure of value of a good or service. C) the Federal Reserve should adopt a monetary growth rule. D) productivity shocks explain fluctuations in real GDP.