Whenever U.S. government spending increases, thereby increasing the demand for real balances and the rate of interest, the currency will appreciate and there is a potential for:
A) overshooting.
B) crowding out.
C) a Republican backlash.
D) recession.
Ans: B) crowding out.
You might also like to view...
Fluctuations in the current account balance are mainly the result of fluctuations in
A) net interest. B) net exports. C) foreign reserves. D) net transfers. E) imports of capital.
A _____ of representative democracy is it _____
a. downside; increases decision-making costs b. benefit; increases decision-making costs c. downside; reduces decision-making costs d. benefit; reduces decision-making costs
Which of the following is likely to have the most price inelastic demand?
a. tablet computers b. leather boots c. lightbulbs d. optional textbooks
Companies are likely to export products abroad in all of the following situations EXCEPT ________.
A) when their average cost per unit of home country production declines substantially by increasing output B) when they want to use the riskiest but most profitable method to engage international trade C) when they aim to increase degree of market diversification D) when they are new to international business