10. “Crowding out” means that a. a government budget deficit lowers interest rates and causes investment spending to rise b. an increase in marginal tax rates lowers production c. a government budget deficit raises interest rates and causes investment spending to fall d. a government budget deficit raises American exports and lowers American imports

10. “Crowding out” means that
a. a government budget deficit lowers interest rates and causes investment
spending to rise
b. an increase in marginal tax rates lowers production
c. a government budget deficit raises interest rates and causes investment
spending to fall
d. a government budget deficit raises American exports and lowers American
imports
by

1 Answer

Answer :

c. a government budget deficit raises interest rates and causes investment
spending to fall
by

Related questions

“Crowding out” means that a. a government budget deficit lowers interest rates and causes investment spending to rise b. an increase in marginal tax rates lowers production c. a government budget deficit raises interest rates and causes investment spending to fall d. a government budget deficit raises American exports and lowers American imports

Description : Crowding out means that a. a government budget deficit lowers interest rates and causes investment spending to rise b. an increase in marginal tax rates lowers production c. a government ... spending to fall d. a government budget deficit raises American exports and lowers American imports

Last Answer : c. a government budget deficit raises interest rates and causes investment spending to fall

Devaluation of currency can correct a Balance of Payments deficit because___ A. It lowers price of exports in foreign currency and rises price of imports in home currency B. It raises price of exports in foreign currency and lowers price of imports in home currency C. It raises price of exports and imports in foreign currency D. It lowers price of exports and imports in home currency

Description : Devaluation of currency can correct a Balance of Payments deficit because___ A. It lowers price of exports in foreign currency and rises price of imports in home currency B. It raises price of ... and imports in foreign currency D. It lowers price of exports and imports in home currency

Last Answer : A. It lowers price of exports in foreign currency and rises price of imports in home currency

6. Assume that Potential Real GDP equals $10,000. National Income is therefore $10,000. Of this, consumers will pay $2,000 in taxes, save $1,000, and spend $7,000 on consumer goods. Business Investment spending is $2000. In order to avoid recessions and inflation (to have equilibrium), the government should have a: a. balanced budget b. budget deficit of $1000 c. budget surplus of $1000 d. budget deficit of $2000 C C A A C

Description : 6. Assume that Potential Real GDP equals $10,000. National Income is therefore $10,000. Of this, consumers will pay $2,000 in taxes, save $1,000, and spend $7,000 on consumer goods. Business Investment ... . budget deficit of $1000 c. budget surplus of $1000 d. budget deficit of $2000 C C A A C

Last Answer : c. budget surplus of $1000

GDP at market prices is the sum of Consumption, Investment, Government Spending and Net Exports. „Net‟ exports is (a) Gross exports minus depreciation ; (b) Exports minus imports ; (c) Gross exports earnings minus capital inflow ; (d) Export minus imports of merchandize

Description : GDP at market prices is the sum of Consumption, Investment, Government Spending and Net Exports. „Net‟ exports is (a) Gross exports minus depreciation ; (b) Exports minus imports ; (c) Gross exports earnings minus capital inflow ; (d) Export minus imports of merchandize 

Last Answer : (b) Exports minus imports ;

Which of the following is not a component of GDP? (a) Government spending (b) Investment © Interest (d) Net exports

Description : Which of the following is not a component of GDP? (a) Government spending (b) Investment © Interest (d) Net exports

Last Answer : © Interest

Under adjustable pegged exchange rates, if the rate of inflation in the United States exceeds the rate of inflation of its trading partners: A. U.S. exports tend to rise and imports tend to fall B. U.S. imports tend to rise and exports tend to fall C. U.S. foreign exchange reserves tend to rise D. U.S. foreign exchange reserves remain constant

Description : Under adjustable pegged exchange rates, if the rate of inflation in the United States exceeds the rate of inflation of its trading partners: A. U.S. exports tend to rise and imports tend to fall ... C. U.S. foreign exchange reserves tend to rise D. U.S. foreign exchange reserves remain constant

Last Answer : B. U.S. imports tend to rise and exports tend to fall

What records a country's transactions (made by individuals, firms and government bodies.) with the rest of the world? a) Trade deficit b) Capital Budget c) Foreign imports d) Balance of Payments or BoP

Description : What records a country's transactions (made by individuals, firms and government bodies.) with the rest of the world? a) Trade deficit b) Capital Budget c) Foreign imports d) Balance of Payments or BoP

Last Answer : b) other things remaining equal

.An increases in investment is most likely to be caused by (a) Lower interest rates (b) Expectations of lower national incomes © A decrease in the marginal propensity to consume (d) An increase in withdrawals.

Description : .An increases in investment is most likely to be caused by (a) Lower interest rates (b) Expectations of lower national incomes © A decrease in the marginal propensity to consume (d) An increase in withdrawals.

Last Answer : (a) Lower interest rates

An increase in investment is caused by (a) Lower interest rates (b) Expectations of lower national income © A decrease in the marginal propensity to consume (d) An increase in withdrawals

Description : An increase in investment is caused by (a) Lower interest rates (b) Expectations of lower national income © A decrease in the marginal propensity to consume (d) An increase in withdrawals

Last Answer : (a) Lower interest rates

10. An increase in the money supply will cause interest rates to a. rise b. fall c. remain unchanged

Description : 10. An increase in the money supply will cause interest rates to a. rise b. fall c. remain unchanged

Last Answer : b. fall

Under a floating exchange-rate system, if American exports increase and American imports fall, the value of the dollar will: A. Appreciate B. Depreciate C. Be officially revalued D. Be officially devalued

Description : Under a floating exchange-rate system, if American exports increase and American imports fall, the value of the dollar will: A. Appreciate B. Depreciate C. Be officially revalued D. Be officially devalued

Last Answer : A. Appreciate

The records of exports and imports in goods and services and transfer payments is known as a) Current account b) Budget surplus c) Economic leakage d) degree of openness

Description : The records of exports and imports in goods and services and transfer payments is known as a) Current account b) Budget surplus c) Economic leakage d) degree of openness

Last Answer : a) Current account

An increase in consumption at any given level of income will lead to (a) Higher aggregate demand. (b) An increase in exports. © A fall in taxation revenue. (d) A decrease in import spending.

Description : An increase in consumption at any given level of income will lead to (a) Higher aggregate demand. (b) An increase in exports. © A fall in taxation revenue. (d) A decrease in import spending.

Last Answer : (a) Higher aggregate demand.

Under a floating exchange-rate system, if American exports decrease and American imports rise, the value of the dollar will: A. Appreciate B. Depreciate C. Be officially revalued D. Be officially devalued

Description : Under a floating exchange-rate system, if American exports decrease and American imports rise, the value of the dollar will: A. Appreciate B. Depreciate C. Be officially revalued D. Be officially devalued

Last Answer : B. Depreciate

'Quota' is - (1) tax levied on imports (2) imports of capital goods (3) limit on the quantity of imports (4) limit on the quantity of exports

Description : 'Quota' is - (1) tax levied on imports (2) imports of capital goods (3) limit on the quantity of imports (4) limit on the quantity of exports

Last Answer : (3) limit on the quantity of imports Explanation: An import quota is a limit on the quantity of a good that can be produced abroad and sold domestically. It is a type of ... production of a good, service, or activity, thus "protect" domestic production by restricting foreign competition.

‘Quota’ is (1) tax levied on imports (2) imports of capital goods (3) limit on the quantity of imports (4) limit on the quantity of exports

Description : ‘Quota’ is (1) tax levied on imports (2) imports of capital goods (3) limit on the quantity of imports (4) limit on the quantity of exports

Last Answer : limit on the quantity of imports

"Closed Economy" means : (1) no provision for public sector (2) no provision for private sector (3) economy policy not well defined (4) a country having no imports and exports

Description : "Closed Economy" means : (1) no provision for public sector (2) no provision for private sector (3) economy policy not well defined (4) a country having no imports and exports

Last Answer : (4) a country having no imports and exports Explanation: Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no ... The goal is to provide consumers with everything that they need from within the economy's borders.

“Closed Economy” means: (1) no provision for public sector (2) no provision for private sector (3) economy policy not well defined (4) a country having no imports and exports

Description : “Closed Economy” means: (1) no provision for public sector (2) no provision for private sector (3) economy policy not well defined (4) a country having no imports and exports

Last Answer :  a country having no imports and exports

Gains from trade can be divided into two parts (a) gains from exports and gains from imports. (b) gains from specialization and gains from exchange. © gains from consumption and gains from production. (d) gains from profit and gains from loss.

Description : Gains from trade can be divided into two parts (a) gains from exports and gains from imports. (b) gains from specialization and gains from exchange. © gains from consumption and gains from production. (d) gains from profit and gains from loss.

Last Answer : (b) gains from specialization and gains from exchange.

Lower interest rates are likely to (a) Decrease consumption. (b) Increase cost of borrowing. © Encourage saving. (d) Increase borrowing and spending.

Description : Lower interest rates are likely to (a) Decrease consumption. (b) Increase cost of borrowing. © Encourage saving. (d) Increase borrowing and spending.

Last Answer : (d) Increase borrowing and spending.

Deficit financing leads to (a) Price rise (b) Price fall (c) Price control (d) None of the above

Description : Deficit financing leads to (a) Price rise (b) Price fall (c) Price control (d) None of the above

Last Answer : a) Price rise

8. If the government lowers taxes by $10 billion, the Real GDP will rise by a. more than $10 billion b. less than $10 billion c. exactly $10 billion

Description : 8. If the government lowers taxes by $10 billion, the Real GDP will rise by a. more than $10 billion b. less than $10 billion c. exactly $10 billion

Last Answer : a. more than $10 billion

Acording to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes - (1) a fall in prices of output and resources (2) a fall in real gross National product and employment (3) a rise in real gross National product and investment (4) a rise in prices of output and resources

Description : Acording to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes - (1) a fall in prices of output and resources (2) a fall in real gross National product ... a rise in real gross National product and investment (4) a rise in prices of output and resources

Last Answer : (1) a fall in prices of output and resources Explanation: In 1936, John Maynard Keynes published the book "The General Theory of Employment, Interest and Money to explain the prolonged and ... at a below-full-employment equilibrium. Suppose that the economy is at the full-employment equilibrium.

According to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes (1) a fall in prices of output and resources (2) a fall in real gross National product and employment (3) a rise in real gross National product and investment (4) a rise in prices of output and resources

Description : According to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes (1) a fall in prices of output and resources (2) a fall in real gross National product and ... rise in real gross National product and investment (4) a rise in prices of output and resources

Last Answer :  a fall in prices of output and resources

The major aim of devaluation is to - (1) encourage imports (2) encourage exports (3) encourage both exports and imports (4) discourage both exports and imports

Description : The major aim of devaluation is to - (1) encourage imports (2) encourage exports (3) encourage both exports and imports (4) discourage both exports and imports

Last Answer : (2) encourage exports Explanation: Devaluation in modern monetary policy is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can ... , discouraging imports. As a result, this may help to reduce a country's trade deficit.

The difference in the value of visible exports and visible imports is called : (1) Balance Sheet of items (2) Balance of Payments (3) Balance of Trade (4) Balance of Account

Description : The difference in the value of visible exports and visible imports is called : (1) Balance Sheet of items (2) Balance of Payments (3) Balance of Trade (4) Balance of Account

Last Answer : (3) Balance of Trade Explanation: Balance of Trade refers to the difference between the value of a country's visible imports and visible exports. Also known as the visible balance, it forms part of ... totals more than the value of visible exports, it is known as an adverse balance of trade.

A country's balance of trade is unfavorable when — (1) exports exceed imports (2) imports exceed exports (3) terms of trade become unfavorable (4) None of these

Description : A country's balance of trade is unfavorable when — (1) exports exceed imports (2) imports exceed exports (3) terms of trade become unfavorable (4) None of these

Last Answer : (2) imports exceed exports Explanation: The balance of trade, or net exports is the difference between the monetary value of exports and imports of output in an economy over a certain period. It is the ... is imported: a negative balance is referred to as a trade deficit or, informally, a trade gap.

If a country devalues its currency, its - (1) (1) Exports become cheaper and imports become costlier (2) (2) Exports become costlier and imports become cheaper. (3) Exports value is equivalent to imports value (4) No effect on exports and imports

Description : If a country devalues its currency, its - (1) (1) Exports become cheaper and imports become costlier (2) (2) Exports become costlier and imports become cheaper. (3) Exports value is equivalent to imports value (4) No effect on exports and imports

Last Answer : (1) Exports become cheaper and imports become costlier Explanation: Devaluation means official lowering of the value of a country's currency within a fixed exchange rate system, by which the ... turn, means that imports are more expensive, making domestic consumers less likely to purchase them.

A favorable Balance of Trade of a country implies that - (1) Imports are greater than Exports (2) Exports are greater than Imports (3) Both Imports and Exports are equal (4) Rising Imports and Falling Exports

Description : A favorable Balance of Trade of a country implies that - (1) Imports are greater than Exports (2) Exports are greater than Imports (3) Both Imports and Exports are equal (4) Rising Imports and Falling Exports

Last Answer : (2) Exports are greater than Imports Explanation: Favorable balance of trade is an imbalance in a nation's balance of trade in which the payments for merchandise exports received by the country exceed ... and income. A balance of trade surplus is often the source of a balance of payments surplus.

The difference between visible exports and visible imports is defined as - (1) Balance of trade (2) Balance of payment (3) Balanced terms of trade (4) Gains from trade

Description : The difference between visible exports and visible imports is defined as - (1) Balance of trade (2) Balance of payment (3) Balanced terms of trade (4) Gains from trade

Last Answer : (1) Balance of trade Explanation: The balance of trade (or net exports, sometimes symbolized as NX) is the difference between the monetary value of exports and imports of output in an economy over a certain period. It is the relationship between a nation's imports and exports.

. Terms of trade is (a) the ratio of imports / exports (b) the ratio of exports/imports © the ratio of goods/services (d) the ratio of land/labour

Description : . Terms of trade is (a) the ratio of imports / exports (b) the ratio of exports/imports © the ratio of goods/services (d) the ratio of land/labour

Last Answer : (b) the ratio of exports/imports

A favourable Balance of Trade of a country implies that (1) Imports are greater than Exports (2) Exports are greater than Imports (3) Both Imports and Exports are equal (4) Rising Imports and Falling Exports

Description : A favourable Balance of Trade of a country implies that (1) Imports are greater than Exports (2) Exports are greater than Imports (3) Both Imports and Exports are equal (4) Rising Imports and Falling Exports

Last Answer :  Exports are greater than Imports

The difference between visible exports and visible imports is defined as (1) Balance of trade (2) Balance of payment (3) Balanced terms of trade (4) Gains from trade

Description : The difference between visible exports and visible imports is defined as (1) Balance of trade (2) Balance of payment (3) Balanced terms of trade (4) Gains from trade

Last Answer :  Balance of trade

A country’s balance of trade is unfavourable when — (1) exports exceed imports (2) imports exceed exports (3) terms of trade become unfavourable (4) None of these

Description : A country’s balance of trade is unfavourable when — (1) exports exceed imports (2) imports exceed exports (3) terms of trade become unfavourable (4) None of these

Last Answer : imports exceed exports

If a country devalues its currency, its (1) Exports become cheaper and imports become costlier (2) Exports become costlier and imports become cheaper. (3) Exports value is equivalent to imports value (4) No effect on exports and imports

Description : If a country devalues its currency, its (1) Exports become cheaper and imports become costlier (2) Exports become costlier and imports become cheaper. (3) Exports value is equivalent to imports value (4) No effect on exports and imports

Last Answer : Exports become cheaper and imports become costlier

The major aim of devaluation is to : (1) encourage imports (2) encourage exports (3) encourage both exports and imports (4) discourage both exports and imports

Description : The major aim of devaluation is to : (1) encourage imports (2) encourage exports (3) encourage both exports and imports (4) discourage both exports and imports

Last Answer : encourage exports

The difference in the value of visible exports and visible imports is called : (1) Balance Sheet of items (2) Balance of Payments (3) Balance of Trade (4) Balance of Account

Description : The difference in the value of visible exports and visible imports is called : (1) Balance Sheet of items (2) Balance of Payments (3) Balance of Trade (4) Balance of Account

Last Answer : Balance of Trade

Whenever the government spends more than it collects through revenue, the resulting imbalance is known as : a) Public deficit b) Market deficit c) Government deficit d) Budget deficit

Description : Whenever the government spends more than it collects through revenue, the resulting imbalance is known as : a) Public deficit b) Market deficit c) Government deficit d) Budget deficit

Last Answer : d) Budget deficit

The effective rate of protection (a). distinguishes between tariffs that are effective and those that are ineffective (b). is the minimum level at which a tariff becomes effective in limiting imports (c). shows how effective a tariff is in raising revenue for the government (d). shows the increase in value added for domestic production that a particular tariff structure makes possible, in percentage terms

Description : The effective rate of protection (a). distinguishes between tariffs that are effective and those that are ineffective (b). is the minimum level at which a tariff becomes effective in ... in value added for domestic production that a particular tariff structure makes possible, in percentage terms

Last Answer : d). shows the increase in value added for domestic production that a particular tariff structure makes possible, in percentage terms

Demand pull inflation may be caused by (a) An increase in cost (b) A decrease in interest rate © A reduction in government spending (d) An outward shift of aggregate supply.

Description : Demand pull inflation may be caused by (a) An increase in cost (b) A decrease in interest rate © A reduction in government spending (d) An outward shift of aggregate supply.

Last Answer : (b) A decrease in interest rate

The idea that irrespective of how a government chooses to increase spending, either by debt financing or tax financing, the outcome will be the same and demand will remain unchanged, is popularly known as: a) Ricardian theory of equivalence b) Ricardian theory of competitive advantage c) Ricardian theory of stability d) None of the above

Description : The idea that irrespective of how a government chooses to increase spending, either by debt financing or tax financing, the outcome will be the same and demand will remain unchanged, is popularly ... b) Ricardian theory of competitive advantage c) Ricardian theory of stability d) None of the above

Last Answer : a) Ricardian theory of equivalence David Ricardo was a British political economist and his most famous theory was that of comparative advantage (along with above theory of Ricardian ... nation should use its resources solely in industries where it has the most international competitiveness

Under a floating exchange-rate system, if the U.S. dollar depreciates against the Swiss franc: A. American exports to Switzerland will be cheaper in francs B. American exports to Switzerland will be more expensive in francs C. American imports from Switzerland will be cheaper in dollars D. None of the above

Description : Under a floating exchange-rate system, if the U.S. dollar depreciates against the Swiss franc: A. American exports to Switzerland will be cheaper in francs B. American exports to Switzerland will ... francs C. American imports from Switzerland will be cheaper in dollars D. None of the above

Last Answer : A. American exports to Switzerland will be cheaper in francs

'Marginal efficiency of capital' is - (1) expected rate of return on new investment (2) expected rate of return of existing investment (3) difference between rate of profit and rate of interest (4) value of output per unit of capital invested

Description : 'Marginal efficiency of capital' is - (1) expected rate of return on new investment (2) expected rate of return of existing investment (3) difference between rate of profit and rate of interest (4) value of output per unit of capital invested

Last Answer : (1) expected rate of return on new investment Explanation: The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before ... partly on expectations of future yields and partly on the actual price of the capital good concerned.

‘Marginal efficiency of capital’ is (1) expected rate of return on new investment (2) expected rate of return of existing investment (3) difference between rate of profit and rate of interest (4) value of output per unit of capital invested

Description : ‘Marginal efficiency of capital’ is (1) expected rate of return on new investment (2) expected rate of return of existing investment (3) difference between rate of profit and rate of interest (4) value of output per unit of capital invested

Last Answer :  expected rate of return on new investment

In International Banking terms,”Appreciation” of Rupee means ________ A. Excess of exports over imports B. Purchasing power of rupee has come down C. Availability of less foreign currency vis-a-vis rupee D. Excess of imports over exports E. Availability of more foreign currency vis-a-vis rupee

Description : In International Banking terms,”Appreciation” of Rupee means ________ A. Excess of exports over imports B. Purchasing power of rupee has come down C. Availability of less foreign currency vis-a-vis rupee D. Excess of imports over exports E. Availability of more foreign currency vis-a-vis rupee

Last Answer : C. Availability of less foreign currency vis-a-vis rupee Explanation: Currency Appreciation refers to increase in the value of domestic currency in terms of foreign currency. The domestic currency becomes more valuable and less of it is required to buy the foreign currency.

Trade Gap means A. Gap between total GDP and total consumption B. Gap between total imports and total exports C. Gap between available liquidity and expected demand in next five months D. Gap between budgeted revenue collection and actual collection of the same E. None of the above

Description : Trade Gap means A. Gap between total GDP and total consumption B. Gap between total imports and total exports C. Gap between available liquidity and expected demand in next five months D. Gap between budgeted revenue collection and actual collection of the same E. None of the above

Last Answer : B. Gap between total imports and total exports Explanation: The amount by which the value of a country‘s visible imports exceeds that of visible exports; an unfavourable balance of trade.

Interest paid by the government on the loans raised is called - (1) Debt Servicing (2) Deficit Financing (3) Discounted Budgeting (4) Bridge-loan

Description : Interest paid by the government on the loans raised is called - (1) Debt Servicing (2) Deficit Financing (3) Discounted Budgeting (4) Bridge-loan

Last Answer : (1) Debt Servicing Explanation: Debt service is the amount of money required to make payments on the principal and interest on outstanding loans, the interest on bonds. or the principal of maturing bonds. An ... or company unable to make such payments is said to be "unable to service one's debt."

Interest paid by the government on the loans raised is called (1) Debt Servicing (2) Deficit Financing (3) Discounted Budgeting (4) Bridge-loan

Description : Interest paid by the government on the loans raised is called (1) Debt Servicing (2) Deficit Financing (3) Discounted Budgeting (4) Bridge-loan 

Last Answer :  Debt Servicing

If the body experiences acidosis the respiratory center located in the medulla gets the information and induces the increase of the respiratory frequency. The increment of the respiratory frequency makes the body eliminate more carbon dioxide and to shift the equilibrium of the formation of bicarbonate towards the spending of more hydrogen ions and thus the blood pH raises.

Description : If the body experiences acidosis the respiratory center located in the medulla gets the information and induces the increase of the respiratory frequency. The increment of the respiratory frequency makes the ... of bicarbonate towards the spending of more hydrogen ions and thus the blood pH raises.

Last Answer : How does the breathing process correct alkalosis?

As the number of investments made by a firm increases, its internal rate of return - (1) declines due to diminishing marginal productivity. (2) declines because the market rate of interest will fall, ceteris paribus. (3) increases to compensate the firm for the current consumption foregone. (4) increases because the level of savings will fall.

Description : As the number of investments made by a firm increases, its internal rate of return - (1) declines due to diminishing marginal productivity. (2) declines because the market rate of interest will ... the firm for the current consumption foregone. (4) increases because the level of savings will fall.

Last Answer : (3) increases to compensate the firm for the current consumption foregone. Explanation: Internal rates of return are commonly used to evaluate the desirability of investments or projects. The higher a ... of return is greater than an established minimum acceptable rate of return or cost of capital.