Crowding out occurs
a. when an increase in government spending crowds out tax revenues.
b. when an increase in government spending increases investment spending.
c. when an increase in government spending crowds out bonds.
d. when an increase in government spending crowds out other types of spending.
e. when an increase in government spending crowds out the money supply.
D
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A firm produces 200 units of a good when it employs 7 workers. The marginal product of the eighth worker is 46 units. If the eighth worker is hired, the firm's total product will increase to:
A) 208 units. B) 228 units. C) 246 units. D) 322 units.
Refer to Figure 21-4. Which of the following is consistent with the graph depicted?
A) an increase in household income B) an increase in tax revenues collected by the government C) an increase in transfer payments to households D) an increase in the proportion of income after net taxes used for consumption
Suppose that the price of eggs increases from 75 cents to $1.00 per dozen and as a result a typical farmer experiences a decrease in egg sales from 300 to 200 dozen per week
Using the method of average values, the absolute price elasticity of demand is A) 1.4. B) 0.8. C) 3.0. D) 1.75.
Which of the statements best describes why the aggregate demand curve is downward sloping?
a. As the aggregate price level increases, consumer expectations about the future change. b. As the aggregate price level decreases, the stock of existing physical capital increases. c. An increase in the aggregate price level causes consumer and investment spending to fall, because consumer purchasing power decreases and money demand increases. e. As a good's price increases, holding all else constant, the good's quantity demanded decreases.