The term "crowding out" refers to the phenomenon that occurs when increased government spending
A) raises the price level and reduces consumption.
B) leads to higher interest rates which reduces private investments.
C) leads to higher bond prices which decreases the demand for Treasury bonds.
D) leads to increased budget deficits that ultimately warrant increases in income taxes.
Answer: B) leads to higher interest rates which reduces private investments.
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The value of the money multiplier will depend on the rate of interest that banks charge
a. True b. False Indicate whether the statement is true or false
The yield on a bond is the
A. annual coupon payment divided by the price paid for the bond. B. coupon rate divided by the price paid for the bond. C. annual coupon payment divided by the face value of the bond. D. same as the interest rate on the bond. E. a and d
Which of the following is an example of a positive statement?
A. NCAA Football should have adopted a playoff system 10 years ago. B. An increase in minimum wage results in higher teenage unemployment. C. No oneshould be allowed to carry guns into the classroom. D. Cats are better pets than dogs.
According to the text, the growth of service sector employment in the US has contributed to
a. higher unemployment rates in the postwar period. b. a slowdown in the growth of real wages during the postwar period. c. reduced economic stability in the postwar period. d. an increase in the power and membership of unions. e. All of the above.