Crowding out, following an increase in government spending, results from (the exchange rate is the foreign exchange price of the domestic currency)
A) higher interest rates and a lower exchange rate.
B) higher interest rates and a higher exchange rate.
C) lower interest rates and a lower exchange rate.
D) lower interest rates and a higher exchange rate.
Answer: B
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The marginal propensity to save is defined as
A) the change in saving divided by the change in disposable income. B) disposable income divided by saving. C) the change in disposable income divided by the change in saving. D) saving divided by disposable income.
In the two-period dynamic monopoly, if the monopolist succeeds in selling a sufficiently high quantity in the first period,
A) the second-period demand curve will lie close to the price axis. B) the second-period demand curve will become horizontal. C) the second-period demand curve will become unit elastic. D) the second-period demand curve will shift substantially to the right.