If private sector investment does not respond much to interest rate changes, then
A) there will be more crowding out when expansionary policies are undertaken.
B) there will be less crowding out when expansionary policies are undertaken.
C) fiscal policy will be less effective than monetary policy.
D) monetary policy will be more effective than fiscal policy.
Answer: B) there will be less crowding out when expansionary policies are undertaken.
You might also like to view...
If the value of the U.S. dollar changes from 1.4 euros to 1.2 euros, we would expect that the United States would experience a ________ in exports and a ________ in imports
A) rise; rise B) fall; fall C) rise; fall D) fall; rise
All of the following, except one, are sources of product differentiation. Which is the exception?
a. product quality b. location c. price d. consumer tastes e. buyers' perceptions
Alejandro Scoobertini owns a store specializing in soccer jerseys. In 2012, he purchased $150,000 worth of jerseys from manufacturers, employed one worker for $40,000, purchased $20,000 worth of supplies from an office supply store, and sold jerseys for
$280,000. Based on this information, what was the value added at Alejandro's store in 2012? A. $70,000. B. $110,000. C. $280,000. D. $490,000.
In order to raise the federal funds rate, the Fed ________ government securities in open market operations, so that banks' reserves ________ and the quantity of money ________
A) buys; decrease; increases B) buys; increase; decreases C) sells; decrease; decreases D) sells; increase; decreases E) buys; increase; increases