A decrease in government spending would
a. lower the interest rate, which is unlikely to influence private investment spending
b. raise the interest rate and decrease private investment spending
c. lower the interest rate and decrease private investment spending
d. raise the interest rate and increase private investment spending
e. lower the interest rate and increase private investment spending
E
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If the production of a good involves negative externalities, ________
A) the quantity of the good supplied in the market is lower than the efficient level B) the optimal price of the good is higher than the price charged in the market C) total welfare can be increased by increasing the production of the good D) average cost of production can be reduced by increasing output above the optimal level
Examining data on cyclical unemployment plotted against unanticipated inflation shows
A) a positive relationship. B) a negative relationship. C) no significant relationship. D) a relationship only during the 1960s.