The crowding out effect would be lower if:
A. the government always ran budget deficits.
B. investment was not sensitive to changes in the interest rates.
C. the interest rate was greatly affected by shifts in the demand of loanable funds.
D. consumption was sensitive to changes in prices.
Answer: B
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If you get a job and are never required to join the union, this is known as a(n)
A) closed shop. B) open shop. C) agency shop. D) union shop.
According to the interest rate effect, as the price level decreases, households and firms' holdings of money ____, interest rates ____, investments ____, and the quantity RGDP demanded ____
a. increases, decrease, increase, decreases b. increases, increase, increase, decreases c. decreases, decrease, increase, increases d. increases, increase, decrease, decreases