Crowding out is the idea that an increase in government spending may cause a reduction in private sector spending.
Answer the following statement true (T) or false (F)
True
Crowding out occurs when a reduction in private sector borrowing (and spending) is caused by increased government borrowing.
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If the United States' unemployment rate is 10 percent and the capacity utilization rate is 70 percent, the economy is in the midst of a ____________.
Fill in the blank(s) with the appropriate word(s).
Use the following table to answer the next question. ItemBillions of DollarsCheckable deposits$597Small time deposits818Currency639Money-market mutual funds held by businesses1,045Savings deposits, including money-market deposit accounts2,866Money-market mutual funds held by individuals979The value of the money included in M2 but not counted in M1 is
A. $4,663 billion. B. $4,442 billion. C. $1,457 billion. D. $2,886 billion.
Nationwide banking might reduce bank failures due to
A) reduced competition. B) reduced lending to small businesses. C) diversification of loan portfolios across state lines. D) elimination of community banks.
Farmer Fanny sells her crops in a perfectly competitive market. If she produces 500 bushels for total revenue of $2,500 and if harvesting the 501st bushel would raise her total cost from $2,500 to $2,505, her
a. revenue will increase by $10 if she harvests the 501st bushel b. revenue will fall by $5 if she harvests the 501st bushel c. average fixed cost will rise if she harvests the 501st bushel d. profit will fall by $10 if she harvests the 501st bushel e. profit will remain unchanged if she harvests the 501st bushel