Describe how no crowding-out effect exists

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Reference no: EM13183537

1. Fiscal policy includes all but which of the following?

A. corporate income tax cuts

B. interest rate cuts

C. income tax increases

D. increase in government spending on homeland security

E. increase in unemployment insurance

2. If the government wished to increase aggregate demand through fiscal policy, which set of policies would it pursue?

A. a tax cut combined with spending cuts

B. a tax increase combined with spending cuts

C. spending increases combined with tax cuts

D. any of the above

E. none of the above

3. The aggregate-supply curve can be shifted to the right by all but which of the following?

A. discovery of new oil reserves

B. new technologies

C. a tax increase

D. an increase in immigration

E. investment tax credit

4. If the marginal propensity to consume equals 0.75, a $6,000,000 increase in government purchases will result in what increase to total output, assuming no crowding-out effect exists?

A. $4,500,000

B. $6,000,000

C. $8,000,000

D. $24,000,000

E. $1,500,000

Reference no: EM13183537

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