Economics

The crowding-out effect is A) the tendency of expansionary fiscal pol

The crowding-out effect is A) the tendency of expansionary fiscal policy to cause an increase in planned investment but not in planned consumption in the U.S. private sector. B) the tendency of contractionary fiscal policy to cause an increase in planned investment but a decrease in planned consumption in the U.S. private sector. C) the […]

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Date: September 2nd, 2020

In the short run, an increase in the price level induces firms to expa

In the short run, an increase in the price level induces firms to expand production because A) they can increase profits by increasing maintenance costs. B) higher prices allow firms to hire more inputs by offering higher prices for inputs, which increases productivity and profits. C) each firm must keep its production level up to […]

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Date: September 2nd, 2020

If the government increases spending while holding taxes constant, we

If the government increases spending while holding taxes constant, we expect A) a decrease in real saving as consumers follow suit and also increase borrowing. B) planned real investment spending by businesses to increase. C) an increase in investment spending by businesses too, as they anticipate future economic growth. D) interest rates to rise.   […]

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Date: September 2nd, 2020