If We Consider the Potential Effects of a Proposed New

question 131

Multiple Choice

If we consider the potential effects of a proposed new government spending program supported by a tax increase, we would expect crowding out to be

• A)greater than it would be without the supply-side effects.
• B)increased as aggregate real income and output rise in the long run.
• C)unaffected by the shifting long-run aggregate supply curve.
• D)dependent upon the impact of this tax change on consumer disposable income.
• E)greater than if it were not supported by a tax increase.

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Definitions:

Annual Demand

The total quantity of a product or service that consumers are willing and able to purchase in a given year.

Orders

Instructions given to buy or sell securities or other types of financial assets.

Break-Even Default Rate

The rate at which defaults on loans or investments would need to reach before an investor or institution starts to lose money.

Economic Order Quantity

A calculation method to find the best order quantity that reduces the overall storage and ordering expenses in stock management.