The crowding-out effect refers to:
a. higher interest rates and reduced private spending that results from financing federal budget deficits.
b. higher future taxes accompanying budget deficits to reduce private consumption.
c. the inflation rate to rise when the unemployment rate is low.
d. increases in private savings to reduce interest rates and, thereby, crowd-out government
a
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If prices are rising on average, then
A) real GDP will be less than nominal GDP in the years before the base year. B) real GDP will be greater than nominal GDP in the years after the base year. C) real GDP will always be equal to nominal GDP. D) real GDP will be greater than nominal GDP in the years before the base year.
Refer to Figure 14.2. Hurricane Katrina was responsible for destroying a large portion of oil and natural gas refining capacity on the Gulf coast in 2005. Other things equal, this would best be represented by a movement from
A) point A to point B. B) point B to point A. C) point B to point C. D) point A to point C.