Assume That If There Were No Crowding Out, an Increase

question 148

Multiple Choice

Assume that if there were no crowding out, an increase in government spending would increase GDP by $100 billion. If there had been partial crowding out, however, then GDP would have

• A) increased by more than $100 billion.
• B) increased by less than $100 billion.
• C) increased by $100 billion.
• D) not increased.

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Definitions:

Investing Activity

A category in the cash flow statement that shows how much money has been spent on or gained from investment operations, excluding amounts related to day-to-day operations.

Indirect Method

A method for preparing the cash flow statement where net income is adjusted for non-cash transactions, deferred income, and changes in working capital to compute net cash from operating activities.

Statement Of Cash Flows

A financial report summarizing the amount of cash and cash equivalents entering and leaving a company.

Book Value

The net value of a company's assets as recorded on its balance sheet, minus its liabilities and intangible assets, such as goodwill.