Monetarists argue that when expansionary fiscal policy is financed through borrowing:
A. Monetary policy becomes tight
B. Private investment spending will be crowded out
C. The demand for money and interest rates both decrease
D. The investment demand curve becomes relatively steep
B. Private investment spending will be crowded out
You might also like to view...
A production function establishes the relationship between:
A) the market price of a good and the sales revenue generated. B) the quantity of output produced and the firm's profit. C) the quantity of inputs used and the quantity of output produced. D) the market price of a good and the quantity of output supplied.
Which of the following policies would most likely increase the money supply?
a. Selling government bonds b. Raising the discount rate c. Lowering tax rates d. Lowering the required reserve ratio e. Decreasing the prime lending rate
The market equilibrium quantity:
A. is sometimes the socially optimal quantity. B. is the socially optimal quantity. C. is not the socially optimal quantity. D. maximizes total economic surplus.
In the long run, what would happen if the demand for agricultural products suddenly became elastic? Explain
What will be an ideal response?