If a Federal Budget Deficit Causes Crowding Out

question 128

Multiple Choice

If a federal budget deficit causes crowding out,

• A)real GDP does not increase by as much as the government purchases of goods and services multiplier would predict because bondholders' saving declines
• B)real GDP does not increase by as much as the government purchases of goods and services multiplier would predict because investment declines
• C)interest rates fall,reducing the burden of the debt
• D)interest rates fall,bringing the current deficit back down
• E)interest rates fall,so that decreases in investment and government purchases of goods and services exactly offset the expansionary effect of the deficit

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Definitions:

Procrastination

The action of delaying or postponing tasks or decisions, often leading to stress, anxiety, and lower performance.

Self-serving Strategies

Behaviors or attitudes adopted by individuals or groups that prioritize personal gain, often at the expense of others or ethical principles.

Self-serving Strategy

A cognitive or behavioral tactic intended to advance one’s own interest at the expense of others or disregard for others’ needs.

Cyberbullying

The use of electronic communication to bully a person, typically by sending messages of an intimidating or threatening nature.