The financing of a government deficit increases interest rates and, as a result, reduces investment spending. This statement describes:
A. the net export effect.
B. the crowding-out effect.
C. the supply-side effects of fiscal policy.
D. built-in stability.
Answer: B
You might also like to view...
If the economy is operating at full employment, then
A) the unemployment rate is zero. B) everyone who wants a job has one. C) the entire labour force is employed. D) the unemployment rate is approximately 3 percent. E) none of the above.
What is TRUE about government budget deficits and surpluses since 1940?
A. There have been more government budget deficits than government budget surpluses. B. Balanced budgets have been more common than government budget deficits or government budget surpluses. C. The number of government budget deficits is about the same as the number of government budget surpluses. D. There have been more government budget surpluses than government budget deficits.
Refer to Table 4-2. The table above lists the highest prices five consumers are willing to pay for a concert ticket. If the price of one of the tickets is $36
A) Violet and Walter receive a total of $52 of consumer surplus from buying one ticket each. No one else will buy a ticket. B) Xavier, Yolanda, and Zachary will receive a total of $68 of consumer surplus since they will buy no tickets. C) Violet and Walter will each buy two tickets. D) Walter will receive $4 of consumer surplus from buying one ticket.
One implication of the fact that profit functions are convex in prices is that firms will always prefer:
a. stable input and output prices. b. input and output prices that fluctuate about a given level. c. stable input prices and fluctuating output prices. d. fluctuating input prices and stable output prices.