The crowding out effect arises when to finance the budget deficit a government

The crowding out effect arises when to finance the

This preview shows page 9 - 10 out of 10 pages.

45. The crowding-out effect arises when, to finance the budget deficit: a.government borrows in the money market, thus increasing interest rates and causing private sector investment spending in the economy to increase. b.government borrows in the money market, thus increasing interest rates and causing private sector investment spending in the economy to decline. c.the progressivity of the tax system increases, thus decreasing interest rates and causing private sector investment spending to increase. d.the progressivity of the tax system decreases, thus decreasing interest rates and causing private sector investment spending to decline. 46 Which of the following is notan automatic stabilizer? 47 Contractionary fiscal policy is designed to combat demand-pull inflation and consists of a decrease in government spending and/or an increase in taxes. A. True B. False
Background image
Penn State University - Abington Econ 104 (Macro) Exam #4 SAMPLE TEST Answer Key1. A 36. C 2. A 37. D 3. B 38. A 4. E 39. A 5. D 40. B 6. B 41. D 7. B 42. C 8. D 43. B 9. D 44. A 10. B 45. B 11. D 46. D 12. A 47. A 13. A 14. D 15. C 16. B 17. C 18. A 19. C 20. D 21. A 22. D 23. C 24. C 25. D 26. B 27. D 28. A 29. A 30. A 31. B 32. D 33. A 34. C 35. A
Background image

You've reached the end of your free preview.

Want to read all 10 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes