The idea the government spending causes a reduction in private investment is called ?

Related Mcqs:

1. Suppose a wave of investor and consumer pessimism in the USA causes a reduction in spending If the US federal Reserve (Which has a broader remit than the Bank of England Which is charged only with controlling inflation) chooses to engage in activist stabilization policy it should ?

   A. Increase government spending and decrease taxes
   B. decrease the money supply
   C. decrease government spending and increase taxes
   D. decrease interest rates

2. What is called when government spending overwhelms government revenue resulting in government borrowing ?

   A. Budget deficit
   B. Deficient financing
   C. Unbalanced spending
   D. Deficit spending

3. If the central bank increases the money supply at the same time as the government increasing spending, it is suggested that investment will ?

   A. Suffer even more
   B. not be reduced as much as it would have been
   C. be replaced by foreign investment
   D. be replaced by consumer spending

4. The way in which government spending is supposed to reduce investment is by increasing ?

   A. incomes
   B. overseas investment
   C. imports
   D. interest rates

5. Suppose two economists are arguing about policies that deal with unemployment. One economist says. The government could lower unemployment by one percentage point if it would just increase government spending by 50 billion dollars the other economist responds Nonsense and poppycock! If the government spent an additional 50 billion dollars it would reduce unemployment by only one tenth of one percent. and that effect would only be temporary! These economists ?

   A. None of these answers
   B. Disagree because they have different scientific judgments
   C. really don’t disagree at all. It just appears that they disagree
   D. disagree because they have different values

6. Government policies that focus on changing taxes and government spending are called ?

   A. fiscal policies
   B. incomes policies
   C. supply-side policies
   D. monetary policies

7. The idea that when externalities are present private parties can arrive at the efficient solution without government intervention under certain circumstance is known as ?

   A. The coase theorem
   B. Arrow’s impossibility theorem
   C. the drop -in-the bucket problem.
   the free rider problem

8. For given government spending and taxation the government budget deficit will grow in _________ and decline in __________?

   A. booms, booms
   B. recession, recession
   C. booms, recessions
   D. recessions, booms

9. The government increase government spending to try to reduce unemployment This is an example of ?

   A. laissez-faire.
   B. monetary policy
   C. fine tuning
   D. automatic stablisers

10. The idea that the money supply should change to accommodate changes in aggregate demand is associated with the idea of ?

    A. Margaret Thatcher
    B. Ronald Reagan
    C. Milton Friedman
    D. John Maynard Keynes