An increase in the budget deficit a. reduces investment because the interest rate rises. b. reduces...
An increase in the budget deficit
a. reduces investment because the interest rate rises.
b. reduces investment because the interest rate falls.
c. raises investment because the interest rate rises.
d. raises investment because the interest rate falls.
Homework Answers
Answer
Option
a. reduces investment because the interest rate rises
A budget deficit =spending -taxes
The taxes are less than the spending. It increases the AD and price level which increases money demand in the economy which increases interest rate and increases in interest rate decreases the investment in the economy.
Add Answer to:
An increase in the budget deficit
a. reduces investment because the interest rate rises.
b. reduces...
QUESTION 22 A decrease in the budget deficit a. may increase, decrease, or not affect investment...
QUESTION 22 A decrease in the budget deficit a. may increase, decrease, or not affect investment spending if private saving doesn’t change. b. makes investment spending fall. c. makes investment spending rise. d. does not affect investment spending. QUESTION 23 A larger budget deficit a. raises the interest rate and investment. b. raises the interest rate and reduces investment. c. reduces the interest rate and investment. d. reduces the interest rate and raises investment. QUESTION 24 A government budget deficit...
Because ________ in the government budget deficit increase the real interest rate, budget deficits can ________...
Because ________ in the government budget deficit increase the real interest rate, budget deficits can ________ firm investment. decreases; increase increases; decrease decreases; decrease increases; increase When banks gain ________, they can ________ their loans; and the money supply ________. withdrawals; decrease; expands reserves; increase; expands withdrawals; increase; expands reserves; increase; contracts
An increase in the budget surplus a. raises net exports and domestic investment. b. raises net...
An increase in the budget surplus a. raises net exports and domestic investment. b. raises net exports and reduces domestic investment. c. reduces net exports and domestic investment.
1) During an expansion, automatic stabilizers cause the federal deficit to a) remain unchanged. b) either...
1) During an expansion, automatic stabilizers cause the federal deficit to a) remain unchanged. b) either increase or decrease. c) increase. d) decrease. 2) An example of an automatic stabilizer is a) changing the tax laws to increase the marginal tax rates. b) the food stamp program. c) the indexation of social security benefits to the consumer price index. d) the interest the government pays on loans. 3) Which of the following is a correct sequence of events during a...
Expansionary fiscal policy that increases the budget deficit may Select one: a. increase business investment by...
Expansionary fiscal policy that increases the budget deficit may Select one: a. increase business investment by reducing interest rates b. increase business investment by increasing interest rates c. reduce business investment by increasing interest rates d. reduce business investment by reducing interest rates
28. Other things the same, a government budget deficit a. reduces public saving, but not national saving. (b. red...
28. Other things the same, a government budget deficit a. reduces public saving, but not national saving. (b. reduces national saving, but not public saving. c. reduces both public and national saving. d. reduces neither public saving nor national saving. 30. Other things the same, an increase in taxes with no change in government purchases makes national saving a rise. The supply of loanable funds shifts right. b. rise. The demand for loanable funds shifts right. c. fall. The supply...
The level of aggregate output demanded rises when the price level falls, because the resulting decrease in the interest rate will lead to a. higher investment spending and higher consumption spending. b. lower investment spending and higher co
1. The level of aggregate output demanded rises when the price level falls, because the resulting decrease in the interest rate will lead to a. higher investment spending and higher consumption spending.b. lower investment spending and higher consumption spending.c. higher investment spending and lower consumption spending.d. lower investment spending and lower consumption spending.
D 7 Which of the followings are effects of the budget deficit Select all that apply...
D 7 Which of the followings are effects of the budget deficit Select all that apply Net exports increase The real exchange rate appreciates The real interest rate rises National saving falls 8 Suppose coffee sells for $3/pound in Seattle and $5/pound in Boston, and the transportation between the two cities costs $3/pound. Then there is no arbitrage. True False
36. According to liquidity-preference theory, why is the g? money-demand curve downward slopin a. because interest...
36. According to liquidity-preference theory, why is the g? money-demand curve downward slopin a. because interest rates rise as the Bank the qua b. because interest rates fall as the Bank of Canada reduces the supp c. because people will want to hold less money as the cost of doing so d. because people will want to hold more money as the cost of doing rest rates fall as the ofCanada reduces the quantity of money demanded anada reduces the...
1.) Using the above figure, if the price level increases the equilibrum interest rate rises and...
1.)
Using the above figure, if the price level increases
the equilibrum interest rate rises and the equilibrium quantity
of money rises
the equilibrium interest rate rises and the equilibrium quantity
of money falls
the equilibrium interest rate rises and the equilibrium quantity
of money stays the same
the equilibrium interest rate falls and the equilibrium quantity
of money falls
the equilibrium interest rate falls and the equilibrium quantity
of money stays the same
2.)
The demand for money is...
28. Other things the same, a government budget deficit a. reduces public saving, but not national saving. (b. reduces national saving, but not public saving. c. reduces both public and national saving. d. reduces neither public saving nor national saving. 30. Other things the same, an increase in taxes with no change in government purchases makes national saving a rise. The supply of loanable funds shifts right. b. rise. The demand for loanable funds shifts right. c. fall. The supply...
D 7 Which of the followings are effects of the budget deficit Select all that apply Net exports increase The real exchange rate appreciates The real interest rate rises National saving falls 8 Suppose coffee sells for $3/pound in Seattle and $5/pound in Boston, and the transportation between the two cities costs $3/pound. Then there is no arbitrage. True False
36. According to liquidity-preference theory, why is the g? money-demand curve downward slopin a. because interest rates rise as the Bank the qua b. because interest rates fall as the Bank of Canada reduces the supp c. because people will want to hold less money as the cost of doing so d. because people will want to hold more money as the cost of doing rest rates fall as the ofCanada reduces the quantity of money demanded anada reduces the...
1.)
Using the above figure, if the price level increases
the equilibrum interest rate rises and the equilibrium quantity
of money rises
the equilibrium interest rate rises and the equilibrium quantity
of money falls
the equilibrium interest rate rises and the equilibrium quantity
of money stays the same
the equilibrium interest rate falls and the equilibrium quantity
of money falls
the equilibrium interest rate falls and the equilibrium quantity
of money stays the same
2.)
The demand for money is...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago