Which of the Following Is FALSE? When There Is an Increase

question 31

Multiple Choice

Which of the following is FALSE? When there is an increase in:

• A)the government budget deficit, the total amount of borrowing falls.
• B)private savings, the interest rate decreases.
• C)the government budget deficit, private investment is crowded out.
• D)private savings, the total amount of borrowing increases.

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Definitions:

Milton Friedman

An American economist and Nobel Prize winner known for his research on consumption analysis, monetary history and theory, and the complexity of stabilization policy.

Economic Thought

A branch of economics that studies the evolution of economic ideas and theories over time.

Keynesians

An economic theory that advocates for active government intervention in the marketplace and monetary policy to manage demand and smooth out cycles of boom and bust.

Monetarists

Economists who believe that variations in the money supply are the main source of economic fluctuations.