The Mechanism of "International Crowding-Out" Is That a Government Budget

question 128

Multiple Choice

The mechanism of "international crowding-out" is that a government budget deficit ________ the domestic interest rate,which makes the dollar ________ expensive for foreigners,which then ________ net exports.

• A)raises,less,lowers
• B)raises,less,raises
• C)raises,more,lowers
• D)lowers,less,lowers
• E)lowers,more,raises

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Definitions:

Total Fixed Cost

The sum of all costs that do not change with the level of output or activity.

Total Variable Cost

Total Variable Cost is the sum of all costs that vary directly with the level of production, such as materials and labor costs.

Purely Competitive Firm

A firm operating in a market where there are many sellers and buyers, products are identical, and there are no barriers to entry, leading to zero long-term economic profits.

Profit

The financial gain made in a transaction or operation, calculated as the difference between revenue and expenses.