Consider a Closed-Economy AD/AS Macro Model

question 35

Multiple Choice

Consider a closed-economy AD/AS macro model.A policy-induced increase in the government's budget deficit is most likely to crowd-out private investment if

• A)interest rates decrease sharply as a result of the deficit.
• B)interest rates rise sharply as a result of the deficit.
• C)rising income increases the volume of saving and interest rates rise very little.
• D)there is a very large output gap.
• E)consumers reduce consumption as a result of the deficit.

---

Definitions:

Frame Analysis

A sociological method for understanding the organization of experience and how individuals perceive and communicate reality.

Sociologists

Experts or scientists who study human society and social behavior by examining the groups, cultures, organizations, social institutions, and processes that people develop.

Abstract Meaning

The conceptual or theoretical significance of a term, idea, or object, as opposed to its concrete or tangible aspects.

Symbolic Interaction

A sociological perspective focusing on how individuals use symbols and meanings to communicate and form social bonds.