Describe the crowding-out effect of an increase in govt

Reference no: EM13204577

Describe the crowding-out effect of an increase in government purchases. Why does the magnitude of the crowding-out effect depend on how responsive interest rates are to increased government borrowing and how responsive investment is to changes in interest rates? How would the size of the crowding-out effect affect the size of the change in aggregate demand that would result from a given increase in government purchases?

Reference no: EM13204577

Questions Cloud

Freezing temperatures : what are the two types of tundra and why do they have below freezing temperatures throughtout most of the year?

What is the size of the population after hours : A certain bacteria population is known to quadruple every 150 minutes. Suppose that there are initially 120 bacteria.

Program to evaluate postfix expressions : write a program to evaluate postfix expressions containing complex numbers using a stack. The algorithm for evaluating a postfix expression requires a stack of complex numbers.

What do you think about cooperative breeding : What do you think about cooperative breeding and when is it advantageous to be a helper to your kin versus going off to try and breed yourself?

Describe the crowding-out effect of an increase in govt : Describe the crowding-out effect of an increase in government purchases. Why does the magnitude of the crowding-out effect depend on how responsive interest rates are to increased government borrowing and how responsive investment is to changes in..

What would happen to autonomous consumption : What would happen to autonomous consumption if household debt fell and the interest rate rose over the same time period What would happen to autonomous consumption if real wealth increased and expectations of the future became more optimistic

How do the decisions differ between capitalist and socialist : What motivated the producers of all the individual products in the store to make them and offer them for sale? How did the producers decide on the best combinations of resources to use Who made those resources available, and why

Why the firm is on the verge of bankruptcy : An industry has five firms, each with a market share of 20 percent. There is no foreign competition, entry into the industry is difficult, and no firm is on the verge of bankruptcy. If two of the firms in the industry seek to merge, this action wo..

Using quadrilateral as the base : Using Quadrilateral as the base, make the hierarchy as deep (number of levels) as possible. Specify the instance fields, properties, and methods for each class.

User Account

All Pages