Crowding out is the theory that an increase in our federal government's budget deficit will likely:
a. increase the national debt.
b. increase interest rates.
c. decrease borrowing by households and businesses
d. reduce the impact of the spending multiplier implies because of crowding out.
e. all of these.
QUESTION 2If a Japanese stereo priced at 1,000,000 yen can be purchased for 1,000, the exchange rate is:
a. 1,000 yen per dollar. b. 1,000 dollars per yen.
c. 0.001 dollars per yen. d. none of these.
QUESTION 3A decrease in the rate of interest, other things being equal, will cause a:
a. rightward shift of the investment demand curve.
b. movement upward along the investment demand curve.
c. movement downward along the investment demand curve.
d. leftward shift of the investment demand curve.
QUESTION 4If the crowding-out effect is strong, how will the potency of discretionary fiscal policy be affected?
a. It will make fiscal policy more potent.
b. It will make fiscal policy less potent.
c. The potency of fiscal policy will be unaffected.
d. The potency of contractionary will be reduced.
QUESTION 5If one U.S. dollar can be exchanged for 5 Swiss francs, then 1 franc can be exchanged for:
a. 5 cents. b. 20 cents.
c. 50 cents. d. 2 dollars.
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