Crowding out occurs when
a. increases in government spending cause interest rates to rise, reducing investment and consumption.
b. decreases in government spending cause interest rates to rise, reducing investment and consumption.
c. increases in taxes cause interest rates to rise, reducing investment and consumption.
d. increases in government spending cause interest rates to fall, reducing investment and consumption.
e. increases in investment and consumption cause interest rates to rise, reducing the ability of the government to borrow funds
Answers: 2
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Suppose that the u.s. dollars-mexican pesos exchange rate is fixed by the u.s. and mexican governments. assume also that labor is mobile between the united states and mexico due to low transportation costs.which of the following situations is likely to happen as a result of a simultaneous increase in the demand for u.s. goods and decrease in the demand for mexican goods? (pick mexican unemployment rate increases, and the country undergoes bad economic times for a sustained u.s. unemployment rate increases, and the country undergoes bad economic times for a sustained mexican unemployment rate rises at first, but it soon drops as unemployed mexicans move to the united states for mexican unemployment rate rises at first, but then it drops as mexican pesos depreciate against u.s. dollars.
Answers: 1
Crowding out occurs when
a. increases in government spending cause interest rates to ri...
a. increases in government spending cause interest rates to ri...
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