A deficit-financed increase in government purchases O A. crowds out investment by decreasing the exchange rate O B. crowds out investment by increasing the exchange rate O C. crowds out consumer spending by reducing consumer incomes. O D. .is this even in English???!! E. crowds out investment spending by decreasing interest rates. O F. crowds out investment spending by increasing interest rates. G. has no negative impact on consumption or investment.
A deficit-financed increase in government purchases O A. crowds out investment by decreasing the exchange rate O B. crowds out investment by increasing the exchange rate O C. crowds out consumer spending by reducing consumer incomes. O D. .is this even in English???!! E. crowds out investment spending by decreasing interest rates. O F. crowds out investment spending by increasing interest rates. G. has no negative impact on consumption or investment.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:A deficit-financed increase in government purchases
O A. crowds out investment by decreasing the exchange rate
O B. crowds out investment by increasing the exchange rate
O C. crowds out consumer spending by reducing consumer incomes.
O D. ..is this even in English???!!
O E. crowds out investment spending by decreasing interest rates.
O F. crowds out investment spending by increasing interest rates.
G. has no negative impact on consumption or investment.
Transcribed Image Text:Why does it sometimes take a long time for prices to rise in response to excessively rapid growth in aggregate demand that pushes output (Y) above its natural level?
O A. Actually, economy wide prices tend to rise almost immediately.
O B. It takes a long time for the transmission of increased demand to get to the manufacturers and the input markets.
C. Both A and B are true.
D. None of the above are true.
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