Which of the following is an example of crowding out?
A) A decrease in the rate of growth of the money supply which causes a decrease in Real GDP.
B) A budget deficit causes an increase in interest rates, which causes a decrease in investment spending.
C) An increase in tariffs which causes a decrease in imports.
D) A decrease in government housing subsidies which causes an increase in private spending on housing.
B
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Suppose the Fed purchases $1 million in bonds in the open market. Explain how the money supply can increase by more than $1 million
What will be an ideal response?
According to the classical macroeconomic model discussed in the text, the key variable which adjusts to keep the economy in equilibrium when leakages are not equal to injections is ...
Select one: a. the inflation rate b. the interest rate c. the unemployment rate d. growth of real GDP
Deficient information on unsafe products can cause:
a. overconsumption of a product. b. waste of resources used to produce a product. c. consumers to pay a higher price for a product. d. all of the above answers are true. e. none of the above answers a. - c. are true.
The quantity theory of money can explain hyperinflations but not moderate inflation
a. True b. False Indicate whether the statement is true or false