The severity of the crowding-out effect will be reduced if
A) the Fed increases the money supply at the same time the federal government increases government spending. .
B) the Fed decreases the money supply at the same time the federal government increases government spending.
C) the Fed does not change the money supply when the government increases government spending.
D) business firms become pessimistic about the future.
Answer: A) the Fed increases the money supply at the same time the federal government increases government spending. .
You might also like to view...
The deadweight loss associated with producing a product that has an external cost occurs because
A) too much output is produced. B) too little output is produced. C) the price that firms charge for the good is too high. D) not enough resources are allocated to producing the good. E) the marginal social cost does not equal zero.
Which of the following statements regarding U.S. economic growth is NOT correct?
A) Over the past 100 years, on the average real GDP per person grew 2 percent a year. B) The average annual growth rate of real GDP per person in the United States was rapid during World War II. C) In the 1930s, real GDP fell well below its trend. D) The growth rate of real GDP per person accelerated between 1973 to 1984.
If two groups disagree about a policy, a smaller group that experiences higher benefits per person can be:
A. as successful as a larger group with smaller benefits per person, but typically not more. B. more difficult to bargain due to the small size of the group. C. the one more likely to get its way. D. the one less likely to get its way.
Betty and Wilma are the only two cashiers employed at a retail store. Each of them works the same 40 hours per week and each can check out 20 customers per hour by manually entering the price of each product purchased into the cash register. The store owner replaces the old cash registers with new ones that automatically scan product prices into the register. With the new register, Betty and Wilma can each check out 60 customers per hour. Their average labour productivity as a team before the new cash registers were introduced was ____ customers per hour and after the new machines were installed was increased to ____ customers per hour.
A. 20; 60 B. 40; 120 C. 40; 60 D. 800; 2400