The United States is experiencing a recession and Congress decides to adopt an expansionary fiscal policy to stimulate the economy. In this case, the crowding-out effect suggests that investment spending would:
A. Increase, thus partially offsetting the fiscal policy
B. Increase, thus partially reinforcing the fiscal policy
C. Decrease, thus partially offsetting the fiscal policy
D. Decrease, thus partially reinforcing the fiscal policy
C. Decrease, thus partially offsetting the fiscal policy
You might also like to view...
Caterpillar has spent $5 million to date on a new plant, and another $2 million is needed to complete the plant. When construction was started, it was projected that production at the new plant would add $12 million to Cat's profit, but new projections show the additional profit will be only $6 million. Assuming the incomplete plant is worthless, should Cat complete the new plant or abandon it?
a. Cat should complete the plant because it would create a net profit of $4 million. b. Cat should complete the plant because it would create a net profit of $1 million. c. Cat should abandon the plant because a $5 million loss is better than a $7 million loss. d. Cat should abandon the plant because it would create a net loss of $1 million..
Karen is attempting to put into words the key idea that encapsulates what her company's brand is intended to stand for in its target market's mind. Karen is writing a __________.
A. positioning statement B. sales promotion C. mixing elements D. brand equity E. leaky bucket
Refer to Figure 7-2. If the tariff was replaced by a quota which limited coffee imports to 20 million pounds, the amount of revenue received by coffee importers would equal
A) $5 million. B) $15 million. C) $50 million. D) $78 million.
Which of the following statements is most accurate about the economies of North Korea and South Korea?
A. Since their division after World War II, North Korea's economy has achieved greater economic growth than South Korea. B. Starting from similar economic positions prior to their division after World War II, South Korea's economy has grown to about 40 times the size of the North Korean economy. C. The economies of both North Korea and South Korea have grown at approximately the same rate since Korea was divided after World War II. D. Since their division after World War II, South Korea has grown much faster than North Korea, but their GDP per capita remains roughly equal.