If government spending increases then, given the real interest rate, Question 16 options: 1) the demand...
If government spending increases then, given the real interest rate,
Question 16 options:
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Homework Answers
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3) |
the demand for goods is unchanged, due to crowding out |
The phenomenon occurs when incresedgovernment involvement in a sector of the market economy affect the remainder market ,eitherin demand or supply sideofthe market.when expansionary fiscal policy reduce investment spendingbythe private sectorof the economy. The govenment spending is ''crowding out'' investment, the reason is - it is demanding more loanable funds and thus causing increased interest rates and therefore reducing investment spending. this analizecan be broadened to multiple aspects that might leave ouput little changed or even smaller.
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If government spending increases then, given the real interest
rate,
Question 16 options:
1)
the demand...
Question 30 2 pts The demand for goods, given the real interest rate o increases less...
Question 30 2 pts The demand for goods, given the real interest rate o increases less than one-for-one with an increase in government spending. O does not increase when government spending increases, due to crowding out. o increases one-for-one with an increase in government spending. o increases more than one-for-one with an increase in current government spending.
if crowding out occurs, an increase in government spending a) decreases the interest rate and consumption...
if crowding out occurs, an increase in government spending a) decreases the interest rate and consumption and investment spending rise b) decrease the interest rate and consumption and investment spending decline c) increases the interest rate and consumption and investment spending decline d) increase the interest rate and consumption and investment spending rise
_lag. The lag between an increase in government spending and the impact of this increased spending...
_lag. The lag between an increase in government spending and the impact of this increased spending on the economy is called the a. effectiveness b.transmission C. legislative d. data QUESTION 49 Complete crowding out implies that as government increases purchases by $1, a. private spending decreases by $1. b. Real GDP remains unchanged. c. there is an equal offsetting decrease in one or more of the components of private expenditures. d. all of the above e none of the above...
3. Explain how an increase in government spending affects real interest rate, money demand and the...
3. Explain how an increase in government spending affects real interest rate, money demand and the general price level in the long run.
(1) Calculate the government spending multiplier if, an increase in government spending by $5 million increases...
(1) Calculate the government spending multiplier if, an increase in government spending by $5 million increases real GDP by $20 million. Group of answer choices 0.20 0.25 2 5 4 (2) A major benefit of automatic stabilizers is that they: Group of answer choices guarantee a balanced budget over the course of the business cycle. have a tendency to reduce the national debt. moderate the effect of fluctuations in the business cycle. require legislative review by Congress before they can...
(1) Other things being equal, which of the following will increase aggregate expenditures? Group of answer...
(1) Other things being equal, which of the following will increase aggregate expenditures? Group of answer choices An increase in domestic prices relative to foreign prices A decrease in the interest rate A decrease in real wealth An increase in income taxes A decrease in government purchases of goods and services (2) If the current unemployment rate is 5 percent and the natural unemployment rate is 6 percent, then the economy is Group of answer choices producing a level of...
16) 16) By definition a direct expenditure offiset will occur whenever A) the interest rate rises....
16) 16) By definition a direct expenditure offiset will occur whenever A) the interest rate rises. B) the interest rate falls C) the government increases spending in an area that competes with the private sector. D) the government increases spending for the military 17 17) Europe and Asia both fall into deep economic recessions. What impact will this have on U.S. asgregate demand? A) U.S aggregate demand will decrease. B) The US aggregate demand curve will shift to the right...
When drawn against the real interest rate, the output demand curve shifts to the right when...
When drawn against the real interest rate, the output demand curve shifts to the right when Question 15 options: 1) current capital stock decreases. 2) current capital stock increases. 3) real wage rate decreases. 4) real wage rate increases. 5) current capital stock and real wage rate increases.
One channel by which government spending crowds out private spending is the interest rate channel. Explain...
One channel by which government spending crowds out private spending is the interest rate channel. Explain in words what this channel is and illustrate the effect using the goods market equilibrium graph and investment and consumption demand graphs.
1) Suppose economists observe that a $10B increase in government spending raises aggregate demand in the...
1) Suppose economists observe that a $10B increase in government spending raises aggregate demand in the economy by $30B. If this country does not trade and there is no crowding out of private sector spending, what would MPC be equal to? 2) Do you agree or disagree with the following statement? Explain your answer “An increase in government purchases (G) is usually a more effective policy than an increase in transfer payments when the goal is to eliminate a recessionary...
Question 30 2 pts The demand for goods, given the real interest rate o increases less than one-for-one with an increase in government spending. O does not increase when government spending increases, due to crowding out. o increases one-for-one with an increase in government spending. o increases more than one-for-one with an increase in current government spending.
_lag. The lag between an increase in government spending and the impact of this increased spending on the economy is called the a. effectiveness b.transmission C. legislative d. data QUESTION 49 Complete crowding out implies that as government increases purchases by $1, a. private spending decreases by $1. b. Real GDP remains unchanged. c. there is an equal offsetting decrease in one or more of the components of private expenditures. d. all of the above e none of the above...
3. Explain how an increase in government spending affects real interest rate, money demand and the general price level in the long run.
16) 16) By definition a direct expenditure offiset will occur whenever A) the interest rate rises. B) the interest rate falls C) the government increases spending in an area that competes with the private sector. D) the government increases spending for the military 17 17) Europe and Asia both fall into deep economic recessions. What impact will this have on U.S. asgregate demand? A) U.S aggregate demand will decrease. B) The US aggregate demand curve will shift to the right...
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