In a Neoclassical Economy, If Consumption Increases as the Interest

question 113

Multiple Choice

In a neoclassical economy, if consumption increases as the interest rate decreases, then a $10 billion rise in government spending would:

• A) still crowd out exactly $10 billion of investment.
• B) crowd out between zero and $10 billion of investment.
• C) not crowd out any investment.
• D) crowd out more than $10 billion of investment.

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Definitions:

Biodiversity

The variety of life in the world or in a particular habitat or ecosystem, including the variety of species, genetic variations, and ecosystems.

Corollary

A proposition that follows with little or no proof required from one already proven, serving as a natural consequence or result.

Deep Ecology

A philosophy that promotes the inherent worth of living beings regardless of their instrumental utility to human needs, deeply questioning mainstream environmentalism's emphasis on resource management.

Inherent Value

The intrinsic worth of something, not based on its utility to humans, often referenced in environmental ethics and conservation.