"Crowding-out" occurs in the IS-LM model as rising government spending requires a in the interest rate in order to the demand for money at the new equilibrium, thus planned private investment. Select one: O a. fall, keep constant, raising O b. rise, lower, raising O c. rise, raise, lowering d. rise, keep constant, lowering

"Crowding-out" occurs in the IS-LM model as rising government spending requires a in the interest rate in order to the demand for money at the new equilibrium, thus planned private investment. Select one: O a. fall, keep constant, raising O b. rise, lower, raising O c. rise, raise, lowering d. rise, keep constant, lowering

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter24: Fiscal Policy

Section: Chapter Questions

Problem 15P

See similar textbooks

Similar questions

Please answer fast please help
If consumption is C=100+0.75Yd Taxes is T=50+0.5Y Export is X=200 Import is M=50+0.25Y Government spending is G=150 Investment is I=200 Usethemultiplierapplicabletoexport,toexplainhowa100–billiondeclineindemand forexportcouldaffecttheeconomy’s: (i) Balanceofpayment
i need the answer quickly
An increase in the income tax rate in an attempt to decrease a country's debt-to-GDP ratio may not be effective because O a. It will reduce disposable income and consumption expenditure O b. It will reduce firms expectations of growth in future sales All of the answers are correct O d. It will reduce investment in new capital stock
Disposable income Lütfen birini seçin: O A. decreases when income decreases O B. is always fixed. O C. all of the answers O D. increases when saving decreases O E decreases when net taxes decrease
You observe a closed economy that has a government deficit and positive investment. Which of the following is correct? Select one: O a. Private saving is negative; public saving is positive. O b. Both private saving and public saving are negative. O . Private saving is positive; public saving is negative. O d. Private and public saving are both positive.
Assume that in 2016, the followng prevals n the Republic of Nurd Goverment spending (0) 50 Not taxos (T)- 50 Planned investment - S30 Assume that househoids in Nurd censume 75 percent of heir income, they save 25 percent of their income. Thun, the consumption function and saving function of Nurd re C-075Y, and S=025Y. where disposabile income YY-T Determine the equilitrium level of income Equilibrium income =$(Enter your reaponse as an integer.)
Give only typing answer with explanation and conclusion
Question Two a. Explain the difference between a binding and non-binding borrowing constraints and thetwo consumption functions that result.b. From the Intertemporal Choice Model, many theories (non-Keynesian theories ofConsumption) came into being. Using graphical and mathematical expressions, compareand contrast the following theories on consumption behaviours:i. Franco Modigliani: Life-Cycle Hypothesisii. Milton Friedman: Permanent-Income Hypothesisiii. Robert Hall: Random Walk Hypothesis
the following macro mo det consumptron : c • C' +cYq and Ya = do posable income Desine d Investment: = I' +jY Government Expenditure s. G =G'+gy Exports = EX : X' IM =F' Imports Taxes : T:T't tY a) what is the equation for y" for this economy? b) Derive for this each of the following multipliers economy. ) Ke' 5) Kpi 2) k 6) Kx' 3) KG' 7) Kg8 "BB 4) Kpi 2 why Might one that the is argue 1 probably a 2 vavia b le g number ? hegathe
Suppose MPC equals 0.9, government taxes 30% of all incomes, and the marginal propensity to import equals 0.07. The economy's real GDP is currently $5,454 billion while its potential real GDP is $6,000 billion. Glven a horizontal SRAS curve, what change in government spending on goods and services would bring the economy to full employment real GDP? When doing the calculations, round the value for the multiplier to 2 decimal places, and round your final value for the change in G to the nearest billion.
The diagram below show the market for financial capital assuming that national income is constant at potential GDP, Y*. Real Interest Rate FIGURE 2 NSO I* 11 12 13 NS1 1 1 ID Quantity of Investment and Saving ($) Refer to Figure 2. Suppose national saving is reflected What is the effect in the market for financial capital? NS, and investment demand is reflected by loº. Now suppose the vernment implements a policy that increases investment tax credit. Select one: O a. Investment demand shifts to 1₁P and the quantity of national saving supplied rises to 1₁. O b. National saving shifts to NS₁, investment demand shifts to 1₁D, and the quantity of national saving rises to 1₁. O c. National saving shifts to NS₁, and the quantity of national saving supplied rises to 1₂. O d. There is no effect on NS or IP and the quantity of national saving supplied remains at I*. O e. Investment demand shifts to I₁P, national saving shifts to NS₁, and the quantity of national saving rises to 13.