Crowding out makes fiscal policy more complicated to formulate because it can ________ the theoretical magnitude of the_______.
A. increase; multiplier effect
B. reduce; multiplier effect
C. reduce; interest rate
D. increase; interest rate
Answer: B
You might also like to view...
How does the market for inputs like labor differ from the market for goods and services?
What will be an ideal response?
Uncontrollable government spending includes
A. Welfare benefits but not unemployment benefits. B. Interest payments on the national debt. C. Spending decisions made in the current year. D. Approximately half of the government spending in the United States.
A decrease in the price of electricity can best be explained by
A. Abnormally cold winters and hot summers. B. The increased use of electronic devices such as computers. C. A decrease in the population. D. A growing economy.
An effective price floor on wheat will:
A. force otherwise profitable farmers out of business. B. result in a shortage of wheat. C. clear the market for wheat. D. result in a surplus of wheat.