Solutions? B) falls; increases C) rises; increases D) rises; decreases 19) The t

Question

Solutions? B) falls; increases C) rises; increases D) rises; decreases 19) The term "crowding out" relates to the decrease in A) consumption expenditure from an increase in investment. B) the real interest rate from a government budget deficit. C) private investment from a govenment budget deficit. D) saving from an increase in disposable income. 20) According to the Ricardo-Barro effect A) the government budget has no effect on the real interest rate B) a government budget deficit crowds out private investment. g government spending with taxes has a smaller effect on private investment than financing through government borrowing. D) None of the above answers are correct. 21) France's government is running a budget deficit. With no Ricardo-Barro effect, which of the following events will occur? I. The supply curve of loanable funds will shift leftward. II. A higher real interest rate crowds out investment. III. Saving increases. A) I and II. B) II and III. C) I only D) III only 22) In the United States today, money consists of A) currency only. B) deposits at banks only C) coins only D) currency and deposits at banks. 23) Which of the following is NOT included in the M1 definition of money? A) currency held outside banks B) time deposits C) traveler's checks D) checking deposits at savings and loans 24) Which of the following is NOT one of the Fed's monetary policy tools? A) last resort loans B) the required reserve ratio C) the income tax rate D) buying and selling U.S. government securities 25) An open market sale of securities by the Fed

Explanation / Answer

19)

private investment from a government budget deficit.

the above is the answer

20)

the government budget has no effect on the real interest rate

the above is the answer

21)

B option is correct

the above is the answer

22)

currency and deposits at banks

the above is the answer

23)

time deposits

the above is the answer

24)

the income tax rate

the above are the answers

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