Chapters 25, 26 and the Conatitution When crowding out oceurs, A) private spendi
ID: 1112494 • Letter: C
Question
Chapters 25, 26 and the Conatitution When crowding out oceurs, A) private spending replaces public spending the dollar typically weakens in foreign exchange markets C) public spending replaces private spending. D) it offsets any gains created by lowered interest rabes 9. Who is authorized to determine what level of speniding can be made from the F treasury? A) The President Federal employees at every level Co he B) C) D) Congress All of the above. o. The graph located above is an example of an economy in recession. an economy with a contractionary gap. an economy experiencing inflation. an economy in equilibrium. A) B) C) D) A federal budget deficit occurs when A) B) C) there is deflation. federal government purchases exceed net taxes. AD exceeds AS AS exceeds AD D)Explanation / Answer
Crowding out occurs when the increased government (public) spending reduces funds for the corporate (private) sector. Thus the correct option is (c)
9. The correct option is (D). All these work together to determine the level of spending.
10. The correct option is (c). The output is above the potential output level. This is inflationary in nature. Had the economy been on the other side of the LRAS that is Q2<Q1 then we have recession.
11. The correct option is (B). the government spending more than it can afford from the income generated through taxes is federal budget deficit.