Which of the Following Would Lower the Amount of Investment

question 147

Multiple Choice

Which of the following would lower the amount of investment crowded out by an increase in government purchases?

• A)A less interest-rate-sensitive exchange rate
• B)Imports becoming less exchange-rate sensitive
• C)A more interest-rate-sensitive exchange rate
• D)Government purchases becoming less interest-rate sensitive
• E)Exports becoming less exchange-rate sensitive

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Definitions:

Foot-In-The-Door Effect

The foot-in-the-door effect is a psychological principle that suggests people are more likely to agree to a large request if they first agree to a smaller one.

Minority Influence

The process by which a smaller part of a group changes the beliefs or behaviors of the majority, often through consistency, commitment, and flexibility.

Self-Confident

Pertains to a state of being secure in oneself and one's abilities.

Groupthink

A psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.