In the Classical Model,beginning from an Equilibrium in Which the Government

question 50

Multiple Choice

In the classical model,beginning from an equilibrium in which the government is running a budget surplus

• A) the supply of loanable funds will be horizontal
• B) an increase in government spending will cause the interest rate to rise
• C) the supply of loanable funds will be vertical
• D) an increase in government spending will crowd out less than an equal amount of private spending
• E) a decrease in government spending will crowd out less than an equal amount of private spending

---

Definitions:

Value-based Pricing

A pricing strategy where the price of a product or service is determined by the perceived value to the customer rather than the cost of production or market prices.

Forklift

A powered industrial vehicle used to lift and move materials over short distances.

Operating Cost

Expenses associated with the day-to-day operations of a business, excluding costs related to the production of goods.

Useful Life

The estimated period over which an asset is expected to be usable by the entity, affecting depreciation calculations.