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29) When private expenditures decrease as a result of increased government 29) spending, this is known as A) the crowding out effect. B) government deficit spending. C) the stabilizer effect. D) the multiplier effect.

29) When private expenditures decrease as a result of increased government 29) spending, this is known as A) the crowding out effect. B) government deficit spending. C) the stabilizer effect. D) the multiplier effect.

Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter18: Six Debates Over Macroeconomic Policy
Section: Chapter Questions
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29) When private expenditures decrease as a result of increased government 29) spending, this is known as A) the crowding out effect. B) government deficit spending. C) the stabilizer effect. D) the multiplier effect. 30) If other factors are held constant, what happens when the federal government finances a growing budget deficit by increasing the amount it borrows from the private sector? A) There will be an increase in the interest rate. B) There will be an increase in net exports. C) The crowding out effect will be cancelled out. D) There will be a decrease in the interest rate. 31) If the government began providing free textbooks to college students who would otherwise have bought their books from the private sector, the government's action would result in A) an increase in real Gross Domestic Product (GDP). B) a reduction of the government deficit. C) a Ricardian dilemma. D) a direct expenditure offset. 32) Supply-side economics focuses on tax cuts to stimulate A) government spending. B) aggregate demand by reducing saving. C) aggregate supply by increasing production. D) military research. 33) Which of the following are lags that fiscal policy makers must cope with? A) Action time lags. C) Effect time lags. B) Recognition time lags. D) All of the above are correct. 30) 31) 32) 33)
Transcribed Image Text:29) When private expenditures decrease as a result of increased government 29) spending, this is known as A) the crowding out effect. B) government deficit spending. C) the stabilizer effect. D) the multiplier effect. 30) If other factors are held constant, what happens when the federal government finances a growing budget deficit by increasing the amount it borrows from the private sector? A) There will be an increase in the interest rate. B) There will be an increase in net exports. C) The crowding out effect will be cancelled out. D) There will be a decrease in the interest rate. 31) If the government began providing free textbooks to college students who would otherwise have bought their books from the private sector, the government's action would result in A) an increase in real Gross Domestic Product (GDP). B) a reduction of the government deficit. C) a Ricardian dilemma. D) a direct expenditure offset. 32) Supply-side economics focuses on tax cuts to stimulate A) government spending. B) aggregate demand by reducing saving. C) aggregate supply by increasing production. D) military research. 33) Which of the following are lags that fiscal policy makers must cope with? A) Action time lags. C) Effect time lags. B) Recognition time lags. D) All of the above are correct. 30) 31) 32) 33)
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