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

Related Mcqs:

1. 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

2. 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

3. 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

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

   A. fiscal drag
   B. investment blight
   C. crowding-out
   D. the Thatcher effects

5. 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

6. Less demand in the economy may increase unemployment; this may lead to less spending which may reduce demand further. This is called ?

   A. The upward accelerator
   B. The downward multiplier
   C. The upward PPF
   D. The downward mpc

7. 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

8. 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

9. Policies to reduce unemployment by reducing union power, tax cuts, reductions in unemployment benefit and investment subsidies are examples of ?

   A. Keynesian policies
   B. Supply-side policies
   C. Monetarist Policies
   D. Classical policies

10. For the Central bank to keep the interest rat unchanged as the government increase spending, the Central Bank must continue to ?

    A. decrease the money supply
    B. increase the money supply
    C. increase the demand for money
    D. decrease the demand for money