If a Federal Budget Deficit Causes Crowding Out,_____

question 138

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 the marginal propensity to consume decreases
• B)real GDP does not increase by as much as the government purchases of goods and services multiplier would predict because investment decreases
• C)interest rates fall,reducing the burden of the debt
• D)firms become more willing to invest
• 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:

Clarity of Organizational Plans

The clear and understandable presentation of strategies and objectives by an organization.

Availability of Performance Feedback

The extent to which individuals can obtain information about the quality and effectiveness of their work performance.

Path-Goal Theory

A leadership theory that suggests the leader's job is to assist followers in attaining their goals and to provide direction or support needed to ensure that their goals are compatible with the objectives of the group or organization.

Substitutes for Leadership

Situational factors that diminish the importance of leadership by providing guidance or motivation to group members, making direct leadership less necessary.