MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 13, Problem 13SQ
To determine
The meaning of crowding out.
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Students have asked these similar questions
When a government runs a deficit, it _________
a. It cuts fundings for defense and uses the money to other government services.
b. It shuts the government down.
c. It borrows from the public through the financial system to increase its spending.
d. It reallocates money from departments that have excesses to departments that have deficits.
Suppose there is an increase in budget deficit, what happens to intrest rates and national savings ?
When the government spends more than it collects in taxes, it can do this by?
a. financing the deficit by buying back bonds
b. financing the surplus by issuing bonds
c. financing the deficit by issuing bonds
d. financing the surplus by issuing bonds
Chapter 13 Solutions
MACROECONOMICS FOR TODAY
Ch. 13.1 - Prob. 1YTECh. 13.1 - Prob. 2YTECh. 13.3 - Prob. 1YTECh. 13.3 - Prob. 2YTECh. 13 - Prob. 1SQPCh. 13 - Prob. 2SQPCh. 13 - Prob. 3SQPCh. 13 - Prob. 4SQPCh. 13 - Prob. 5SQPCh. 13 - Prob. 6SQP
Ch. 13 - Prob. 7SQPCh. 13 - Prob. 8SQPCh. 13 - Prob. 9SQPCh. 13 - Prob. 10SQPCh. 13 - Prob. 11SQPCh. 13 - Prob. 1SQCh. 13 - Prob. 2SQCh. 13 - Prob. 3SQCh. 13 - Prob. 4SQCh. 13 - Prob. 5SQCh. 13 - Prob. 6SQCh. 13 - Prob. 7SQCh. 13 - Prob. 8SQCh. 13 - Prob. 9SQCh. 13 - Prob. 10SQCh. 13 - Prob. 11SQCh. 13 - Prob. 12SQCh. 13 - Prob. 13SQCh. 13 - Prob. 14SQCh. 13 - Prob. 15SQCh. 13 - Prob. 16SQCh. 13 - Prob. 17SQCh. 13 - Prob. 18SQCh. 13 - Prob. 19SQCh. 13 - Prob. 20SQ
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Similar questions
- The U.S. government has shut down a number of times In recent history Explain how a government shutdown will affect the variables In the national Investment and savings identity Could the shutdown affect the government budget deficit?arrow_forwardWhat must take place for the government to run deficits without any crowding out?arrow_forwardDescribe how a plan for reducing the government deficit might affect a college student, a young professional, and a middle-income family.arrow_forward
- “Crowding out” refers to the situation in whicha. borrowing by the federal government raisesinterest rates and causes firms to invest less.b. foreigners sell their bonds and purchase U.S.goods and services.c. borrowing by the federal government causesstate and local governments to lower theirtaxes.d. increased federal taxes to balance the budgetcause interest rates to increase and consumercredit to decrease.arrow_forwardThe effects of a budget deficit can be offset by: a. External financing b. Crowding out c. A structural deficit d. All of the above Crowding out occurs when: a. Business investment increases due to lower interest rates b. There is an increase in business borrowing c. An increase in federal borrowing reduces private borrowing d. There is an increase in the nations’ savings If the government wanted to reduce inflation in the economy, it could: a. Increase income transfers b. Increase government spending c. Cut taxes d. Increase taxesarrow_forwardDiscuss the federal budget of the U.S government. should it always be balanced? when is the most appropriate time economically speaking for the federal budget be in a deficit? as a borrower how is the federal government different from the average U.S adult?arrow_forward
- How does tax cuts encourage saving and investmentarrow_forwardWhat happens to the following variables during an expansion? a. government budget deficits (surplus)arrow_forwardWhat is likely to happen to a country's budget deficit if the government increases spending without raising taxes during a period of economic stagnation? A. The budget deficit will decrease because government spending will stimulate economic growth. B. The budget deficit will increase because government spending exceeds tax revenue. C. The budget deficit will remain unchanged because the increase in government spending is offset by increased tax revenue from stimulated economic activity. D. The budget deficit will turn into a budget surplus because increased government spending always leads to higher tax revenues in the long run.arrow_forward
- Assume the U.S. government was to decide to increase the budget deficit. This action will most likely cause __________ to increase. A. interest rates B. education level C. unemployment D. taxarrow_forwardAs long as tax rates are not very high, a decrease in tax rates will tend to a. increase the budget deficit b. decrease the budget deficit c. leave the budget deficit unchanged d. cause the budget deficit to first decrease then increasearrow_forwardHow does the government spend? How does the government tax? What are the budget deficits?arrow_forward
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