Which of the following would make fiscal policy more effective? Select one: If t

Question

Which of the following would make fiscal policy more effective? Select one: If there people who receive tax rebates save the money If there was more crowding out If there were long time lags. If there was a bigger spending multiplier In discussion about fiscal policy, crowding out refers to: Select one: When foreign imports replace domestic production When high taxes decrease labor force participation When government use of resources displaced private use of resources When high prices push people out of the market The money multiplier equals Select one: The amount of money supply divided by the amount of reserves. one divided by the difference between the reserve ratio and the required reserve ratio one divided by the reserve ratio one divided by the discount rate

Explanation / Answer

1. (d) If there was a bigger spending multiplier

2. (c) When government use of resources displaced private use of resources

Crowding out refers to decline of private investment due to fiscal expansion.

3. (c) one divided by the reserve ratio

Multiplier = 1/ reserve ratio

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