"Crowding-Out" Occurs in the IS-LM Model as Rising Government Spending

question 119

Multiple Choice

"Crowding-out" occurs in the IS-LM model as rising government spending requires a ________ in the interest rate in order to ________ the demand for money at the new equilibrium,thus ________ planned private investment.

• A)rise,keep constant,lowering
• B)rise,raise,lowering
• C)rise,lower,raising
• D)fall,keep constant,raising
• E)fall,raise,lowering

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Definitions:

Drug Use

The consumption of substances that alter the mind or body, which can encompass both medical and non-medical substances.

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Refers to an individual's psychological state when awake and aware of their thoughts, feelings, and environment.

Cocaine

A powerful stimulant drug derived from the leaves of the coca plant, known for its potent effects on the nervous system.

Barbiturates

A class of drugs derived from barbituric acid, used as sedatives and hypnotics, which can depress the central nervous system.