When the supply of real loanable funds is upward-sloping and the demand for real loanable funds rises, complete crowding-out:
a. Occurs because private demand falls by the same amount that government borrowing rises.
b. Does not occur because taxes rise with the increase in real GDP.
c. Does not occur because new funds are supplied to the Real Loanable Funds Market as the real, risk-free interest rate rises.
d. Occurs because private borrowers will increase the amount their loans as the real risk-free interest rate rises.
.C
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The demand for tobacco is price inelastic. Suppose there is a drought that destroys a large portion of the tobacco crop
What will happen in the market for tobacco? Will the equilibrium price and quantity change? If so, how? What will happen to the total revenue earned by tobacco farmers?
The formula for calculating the cross price elasticity of demand is: a. the change in the quantity demanded of one good divided by the change in the price of another good
b. the percentage change in demand of one good divided by the percentage change in the price of another good. c. the percentage change in the quantity supplied of one good divided by the percentage change in the price of another good. d. the percentage change in the price of one good divided by the percentage change in the quantity demanded of another good.