Which cause-and-effect chain would best explain the reason for a crowding-out effect? An expansionary fiscal policy:
A. decreases interest rates that decrease private investment spending.
B. increases interest rates that decrease private investment spending.
C. increases interest rates that increase private investment spending.
D. decreases interest rates that increase private investment spending.
Answer: B
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As a substitute for laboratory experiments, economists use evidence available through history's
What happened in the banking industry with the introduction of ATMs which had a higher MP/P than for the substitute resource of human tellers?
A. Human tellers replaced many ATMs because people did not want to use ATMs B. ATMs replaced many human tellers because it reduced banks' costs C. More of both ATMs and human tellers were used because banks were more productive D. Less of both ATMs and human tellers were used because banks did not know how to use the new technology
If two duopolists can stick to a cartel agreement to boost their prices, then both
A) earn greater profits than if they did not collude. B) price at marginal cost. C) price below average total cost. D) decrease their economic profits. E) increase their production so that each produces more than if they did not collude.
Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve reduces the required reserve ratio to 4 percent, then the bank can make a maximum loan of
A) $0. B) $4 million. C) $6 million. D) $10 million.