If the Economy Is Operating at Capacity, an Increase in Government

question 99

Multiple Choice

If the economy is operating at capacity, an increase in government spending will ________ investment.

• A) minimally crowd out
• B) partially crowd out
• C) completely crowd out
• D) have no crowding-out effect on

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Definitions:

Held Abroad

Refers to assets or investments located or held in a foreign country, outside of the investor's home nation.

Unit Of Account

The yardstick people use to post prices and record debts.

Legal Tender

Legal tender refers to money that must be accepted if offered in payment of a debt in the jurisdiction where the payment is being made.

Medium Of Exchange

An item that buyers give to sellers when they want to purchase goods and services.