If the government ran a major deficit, and there was no noticeable effect on the level of GDP, this could be taken as evidence of
a. crowding-in.
b. structural deficit.
c. crowding-out.
d. monetary policy ineffectiveness.
c
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An economic activity in which benefits or costs affect third parties is called
A) a public good. B) a third-party good. C) the exclusion principle. D) an externality.
During the American Revolution, Washington's army nearly starved to death after price controls were enacted to "help" buy food for the army at affordable prices. The Continental Congress later passed a law which
a. exhorted the public to obey the law and help supply food to the army. b. passed tax increases to punish those who refused to sell the food. c. revised the American Law of Supply and Demand. d. overrode local ordinances and essentially repealed the price controls. e. called for the repeal of other price control measures.
The main reason the United States established a central bank was
A. a desire for a strong centralized financial authority. B. to follow the conclusions of economic theory. C. severe inflation after the Civil War. D. disastrous experiences with financial panics.
Which of the following is NOT a reason why we see little international policy coordination?
A. The benefits of international policy coordination are likely to be small in most situations. B. Governments often have difficulty in delivering on their commitments as part of any international policy coordination. C. The interventions by the different governments according to the policy coordination are usually effective only in the very long run. D. The policy goals of different countries are often incompatible.