Homework answers / question archive / Crowding out of government spending refers to the notion that: A) when the government increases spending, the interest rate declines and investment increases B) when the government increases spending, the interest rate increases and investment decreases C) when the government increases spending, the interest rate increases and investment increases D) it doesn't affect the economy 69

Crowding out of government spending refers to the notion that: A) when the government increases spending, the interest rate declines and investment increases B) when the government increases spending, the interest rate increases and investment decreases C) when the government increases spending, the interest rate increases and investment increases D) it doesn't affect the economy 69

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Crowding out of government spending refers to the notion that: A) when the government increases spending, the interest rate declines and investment increases B) when the government increases spending, the interest rate increases and investment decreases C) when the government increases spending, the interest rate increases and investment increases D) it doesn't affect the economy 69. According to the Solow growth model, high population growth rates: A) place great strains on an economy's productive resources, resulting in perpetual poverty. B) are not a factor in determining living standards. C) force the capital stock to be spread thinly, thereby reducing living standards. D) are a prerequisite for technological advances and higher living standards. 70. When there is a short run supply shock (perhaps because input prices increase) then economic theory tells us that the economic output will recover to the same level in the long run because: A) input price and wages contracts will both decline in the long rurn (both mature in the long run) B) it doesn't affect the economy. C) wage contracts are flexible and will decline in the long run (mature in the long run). D) input price contracts are flexible and will decline in the long run (mature in the long run). 71. If the LM curve shifts to he right, A) the aggregate demand curve will shift to the left. B) the aggregate supply curve will shift to the left. C) the aggregate demand curve will shift to the right. D) the aggregate supply curve will shift to the right. 72. The IS curve provides combinations of interest rates and income that satisfy equilibrium in the market for _, and the LM curve provides combinations of interest rates and income that satisfy equilibrium in the market for A) real money balances: goods and services B) saving and investment planned spending C) real money balances; loanable funds D) goods and services; real money balances