Crowding out is the tendency for increased government deficits to:
A. increase consumption spending.
B. increase investment spending.
C. reduce investment spending.
D. reduce consumption spending.
Answer: C
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When a government changes the official exchange rate target in a fixed exchange regime, there is a danger of
A) realignment pain. B) systemic risk. C) crowding out. D) a beggar-thy-neighbor effect.
The LM curve
A) is horizontal. B) is vertical. C) slopes downward. D) slopes upward.
The __________ is always larger than the __________
A) yield on a discount basis; coupon equivalent yield B) yield on a discount basis; bond equivalent yield C) coupon equivalent yield; yield on a discount basis D) None of the above.
An increase in government spending will cause a(n):
a. Increase in aggregate demand b. Decrease in aggregate demand c. Increase in aggregate supply d. Decrease in aggregate supply