According to a 2009 article in The Economist, the multiplier effect and crowding-out effect would exactly offset each other when the economy is
a. operating at full capacity.
b. in recession.
c. experiencing zero inflation.
d. experiencing high rates of inflation.
a
You might also like to view...
Which of the following is NOT part of GDP calculated using the expenditure approach?
A) General Motors' purchases of new capital equipment B) expenditures by the federal government for national defense C) Social Security payments made to the elderly D) the purchase of new homes by consumers
If the newspaper reported that wearing plaid clothing was a sure way to obtain good grades, students'
A) budget lines would shift rightward to compensate for the higher price of plaid clothing. B) budget lines would rotate so that more plaid clothing would be purchased. C) preferences would change in favor of more plaid clothing. D) none of the above
If real GDP and aggregate expenditure are less than equilibrium expenditure, what happens to firms' inventories? How do firms change their production? And what happens to real GDP?
What will be an ideal response?
If the price of roses decreases, the supply of roses will also decrease. This statement is an example of a(n) ______.
a. fallacy b. hypothesis c. aggregate d. ceteris paribus