The crowding-out effect is likely to be the strongest during periods of
A. recession.
B. large budget surpluses.
C. high employment.
D. expanding money supply.
Answer: C
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Refer to Figure 12-9. At price P3, the firm would
A) lose an amount less than fixed cost. B) lose an amount more than fixed cost. C) break even. D) lose an amount equal to its fixed cost.
A monopolistic competitive firm in the long run sets price equal to the minimum point on the long-run average cost curve
a. True b. False Indicate whether the statement is true or false
Which of the following is a term for an innovative new product or production technology which disrupts the status quo in a market, leading the innovators to earn more income and profits and the other firms to lose income and profits, unless they can come up with their own innovations?
a. disruptive technological change b. disruptive market change c. disruptive trade change d. disruptive transfer change
Which of the following is true when the government attempts to move the economy to full employment by increasing spending?
A. The desired stimulus should be set by the multiplier divided by the AD shortfall. B. The total change in spending includes both the new government spending and the subsequent increases in consumer spending. C. It must initially spend more than the GDP gap if the aggregate supply curve is upward-sloping. D. The desired stimulus should be set by the AD shortfall multiplied by the multiplier.