Crowding Out Will Be Greater

question 10

Multiple Choice

Crowding out will be greater

• A)the less sensitive consumption spending is to changes in the interest rate.
• B)the further equilibrium GDP is below potential GDP.
• C)the more sensitive investment spending is to changes in the interest rate.
• D)if the economy is in recession,rather than at full employment.

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Definitions:

Watch-Making Plant

A factory or workshop where watches are manufactured, assembled, and sometimes designed.

Role Expectations

The behaviors and actions anticipated from an individual performing a specific role or position within a social or organizational context.

Groupthink

Groupthink is a psychological phenomenon that occurs within a group of people, in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Very Cohesive

Describes a group or organization characterized by a high degree of unity, solidarity, and mutual support among its members.