Expansionary fiscal policy that increases the budget deficit may Select one: a. increase business investment by...
Expansionary fiscal policy that increases the budget deficit may
Select one:
a. increase business investment by reducing interest rates
b. increase business investment by increasing interest rates
c. reduce business investment by increasing interest rates
d. reduce business investment by reducing interest rates
Homework Answers
Expansionary Fiscal Policy that Increases budget deficits leads to a demand for loanable funds in the market for loanable funds. As a result, interest rate increases.
Increase in Interest Rate leads to a Decrease in Business Investment. Therefore, Expansionary Fiscal Policy that Increases Budget Deficits reduces business Investment by Increasing Interest rates. This reduction in investment spending is known as " Crowding out of Private investment".
Thus, Option c is correct.
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Expansionary fiscal policy that increases the budget deficit
may
Select one:
a. increase business investment by...
the possible answers: How will an expansionary fiscal policy affect exchange rates, via interest rates? Expansionary...
the possible answers:
How will an expansionary fiscal policy affect exchange rates, via interest rates? Expansionary Fiscal Policy select answer select answer Competitiveness decreases Competitiveness increases The domestic currency depreciates The domestic currency appreciates Income decreases Income increases Interest rates decrease Interest rates increase Imports decrease Imports increase Price level decreases Price level increases Trade deficit decreases Trade deficit increases
Question 4 Which factor is an expansionary fiscal policy? A. an increase in taxes that reduces...
Question 4 Which factor is an expansionary fiscal policy? A. an increase in taxes that reduces the budget deficit and decreases consumption B. a decrease in government spending C. an increase in unemployment benefits D. an increase in the money supply that decreases interest rates > Moving to another question will save this response.
The crowding-out from expansionary fiscal policy causes real interest rates to (increase/decrease) investment to (decrease/increase) , and...
The crowding-out from expansionary fiscal policy causes real interest rates to (increase/decrease) investment to (decrease/increase) , and aggregate demand to shift (left/right),(decreasing/increasing) the overall impact of expansionary economic policy.
1. When the government increases spending by issuing more bonds, it causes: a) nations currency to...
1. When the government increases spending by issuing more bonds, it causes: a) nations currency to appreciate b)exports increase c)interest rates decrease d)demand for loanable funds decrease e)decreases merchandise trade deficit 2. When the Fed decreases money supply to combat inflation, it cuases: a)the price of the U.S. dollar to decrease b) capital to flow out of the US c)an increase in the merchandise trade deficit d)an increase in private spending e) a decrease in the interest rates 3. Which...
Which of the following is an example of an expansionary fiscal policy? a. The US government increasing corporate taxes b...
Which of the following is an example of an expansionary fiscal policy? a. The US government increasing corporate taxes b. The US government lowering spending in order to balance the budget c. The US government lowering corporate and individual taxes d. The Fed lowering interest rates Which of the following is an example of contractionary monetary policy? a. The Fed conducting open market purchase b. The Fed conducting open market sale c. The US government increases taxes d. The Fed...
Question 13 (3 points) Which fiscal policy is likely to reduce the government's budget deficit? Contractionary...
Question 13 (3 points) Which fiscal policy is likely to reduce the government's budget deficit? Contractionary fiscal policy Fiscal stimulus Expansionary fiscal policy O Automatic fiscal policy Page 13 of 30 Previous Page Next Page
What effect does a contractionary fiscal policy have on the federal budget and private investment? Select...
What effect does a contractionary fiscal policy have on the federal budget and private investment? Select the correct answer below: It increases the surplus, leading to crowding out. It decreases the surplus, leading to crowding in. It increases the deficit, and crowds out private investment. It decreases the deficit, and encourages private investment.
1. Which is not an effect of increases in gov. deficit spending? a) Capital inflow increase...
1. Which is not an effect of increases in gov. deficit spending? a) Capital inflow increase b)Increase in imports c)Increase in interest rates d)Decrease in exports e)Decrease in the trade deficit 2. The twin deficits effects is used to describe simultaneous deficits in the USA gov. budget and: a)International trade b)Monetary policy c)Gov. expenditures d)unemployment e)None of these 3. If an expansionary monetary policy increases the supply of US dollars, what effect will this have on the US dollar value...
According to the Crowding out theory, if the government engages in expansionary fiscal policy, which of...
According to the Crowding out theory, if the government engages in expansionary fiscal policy, which of the following will take place? an increase in the deficit, an increase in demand for loanable funds, an increase in interest rates and a decrease in AD an increase in the deficit, an increase in demand for loanable funds, a decrease in interest rates and a decrease in AD an increase in the deficit, a decrease in demand for loanable funds, a decrease interest...
Other things equal, an increase in the government budget deficit increases business prospects. might not have...
Other things equal, an increase in the government budget deficit increases business prospects. might not have any effect on interest rates. drives the interest rate up. drives the interest rate down.
the possible answers:
How will an expansionary fiscal policy affect exchange rates, via interest rates? Expansionary Fiscal Policy select answer select answer Competitiveness decreases Competitiveness increases The domestic currency depreciates The domestic currency appreciates Income decreases Income increases Interest rates decrease Interest rates increase Imports decrease Imports increase Price level decreases Price level increases Trade deficit decreases Trade deficit increases
Question 4 Which factor is an expansionary fiscal policy? A. an increase in taxes that reduces the budget deficit and decreases consumption B. a decrease in government spending C. an increase in unemployment benefits D. an increase in the money supply that decreases interest rates > Moving to another question will save this response.
Question 13 (3 points) Which fiscal policy is likely to reduce the government's budget deficit? Contractionary fiscal policy Fiscal stimulus Expansionary fiscal policy O Automatic fiscal policy Page 13 of 30 Previous Page Next Page
According to the Crowding out theory, if the government engages in expansionary fiscal policy, which of the following will take place? an increase in the deficit, an increase in demand for loanable funds, an increase in interest rates and a decrease in AD an increase in the deficit, an increase in demand for loanable funds, a decrease in interest rates and a decrease in AD an increase in the deficit, a decrease in demand for loanable funds, a decrease interest...
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