“Crowding-out” refers to the process by which
A. high consumption leads to low saving and investment.
B. the Fed prevents “runs” on banks.
C. Fed sales of bonds reduce the ability of corporations to buy bonds.
D. increased government spending raises interest rates, thus lowering investment spending.
Answer: D
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The industry elasticity of demand for good X is ?1.5, while the elasticity of demand for an individual manufacturer of good X is ?9. Based on this information, the Rothschild index of market power is:
A. 1/6, indicating there is significant monopoly power in this industry. B. 1/6, indicating there is little monopoly power in this industry. C. 6, indicating there is little monopoly power in this industry. D. None of the answers are correct.
In a private closed economy _____ investment is equal to saving at all levels of GDP and equilibrium occurs only at that level of GDP where _____ investment is equal to saving
A. planned; actual B. actual; planned C. gross; net D. net; gross
________ a nation's production possibilities frontier represents economic growth
A) Moving up along B) An outward shift of C) An inward shift of D) Moving down along
Assume that when the price of good Z is increased from $5 to $6, the total revenue earned increases from $600 to $690. Based on this information, we can conclude that over this range, demand for Z is:
A) elastic. B) unit elastic. C) inelastic. D) perfectly inelastic.