Which of the following sequences best represents the crowding-out effect? O a. government purchases ↓➡ GDP ↓➡ demand for money ↓ ⇒ equilibrium interest rate ↓➡ quantity of goods and services demanded ↓ O b. taxes ↑ GDP↓ demand for money ↓➡ equilibrium interest rate ↑ ➡quantity of goods and services demanded ↓ O c. government purchases ↑ GDP ↑supply of money ↓ 1 ➡ equilibrium interest rate ↑ quantity of goods and services demanded ↓ O d. government purchases ↑ ⇒GDP ↑ demand for money ↑ ➡ equilibrium interest rate ↑ quantity of goods and services demanded ↓

Which of the following sequences best represents the crowding-out effect? O a. government purchases ↓➡ GDP ↓➡ demand for money ↓ ⇒ equilibrium interest rate ↓➡ quantity of goods and services demanded ↓ O b. taxes ↑ GDP↓ demand for money ↓➡ equilibrium interest rate ↑ ➡quantity of goods and services demanded ↓ O c. government purchases ↑ GDP ↑supply of money ↓ 1 ➡ equilibrium interest rate ↑ quantity of goods and services demanded ↓ O d. government purchases ↑ ⇒GDP ↑ demand for money ↑ ➡ equilibrium interest rate ↑ quantity of goods and services demanded ↓

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

Which of the following sequences best represents the crowding-out effect?
O a. government purchases ↓➡ GDP ↓➡ demand for money ↓
⇒
⇒ equilibrium interest rate ↓ →quantity of goods and services demanded ↓
O b. taxes ↑ GDP demand for money ➡equilibrium interest rate ↑
➡quantity of goods and services demanded ↓
O c. government purchases ↑ GDP ↑ supply of money ↓
1
1
⇒ equilibrium interest rate ↑ ⇒ quantity of goods and services demanded
d. government purchases ↑ = ⇒GDP ↑ demand for money ↑
⇒ equilibrium interest rate ↑ quantity of goods and services demanded ↓

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