29) When private expenditures decrease as a result of increased government 29)spending, this is known asA) the crowding out effect.B) government deficit spending.C) the stabilizer effect.D) the multiplier effect.30) If other factors are held constant, what happens when the federalgovernment finances a growing budget deficit by increasing the amountit borrows from the private sector?A) There will be an increase in the interest rate.B) There will be an increase in net exports.C) The crowding out effect will be cancelled out.D) There will be a decrease in the interest rate.31) If the government began providing free textbooks to college studentswho would otherwise have bought their books from the private sector,the government's action would result inA) an increase in real Gross Domestic Product (GDP).B) a reduction of the government deficit.C) a Ricardian dilemma.D) a direct expenditure offset.32) Supply-side economics focuses on tax cuts to stimulateA) government spending.B) aggregate demand by reducing saving.C) aggregate supply by increasing production.D) military research.33) Which of the following are lags that fiscal policy makers must copewith?A) Action time lags.C) Effect time lags.B) Recognition time lags.D) All of the above are correct.30)31)32)33)

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29) When private expenditures decrease as a result of increased government 29) spending, this is known as A) the crowding out effect. B) government deficit spending. C) the stabilizer effect. D) the multiplier effect.

29) When private expenditures decrease as a result of increased government 29) spending, this is known as A) the crowding out effect. B) government deficit spending. C) the stabilizer effect. D) the multiplier effect.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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