If Interest Rates Adjust to Equate Savings and Investment, Then

question 83

Multiple Choice

If interest rates adjust to equate savings and investment, then an expansionary fiscal policy is:

• A)more likely to increase interest rates and less likely to crowd out investment.
• B)more likely to increase interest rates and more likely to crowd out investment.
• C)less likely to increase interest rates and less likely to crowd out investment.
• D)less likely to increase interest rates and more likely to crowd out investment.

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Definitions:

No Reaction

A condition where no chemical change occurs between reactants under specified circumstances.

Reaction

A process in which one or more substances are changed into others by reorganization of constituent atoms.

Reaction

A chemical change that occurs when substances combine or decompose forming new compounds.

Boiling Point

The temperature at which a liquid’s vapor pressure equals the external pressure surrounding the liquid, causing it to turn into vapor.