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pychu [463]
3 years ago
12

Suppose the government increases spending without changing taxes in an effort to shift the aggregate demand curve to the right,

thereby increasing both real GDP and the price level. If the central bank responds to the increase in prices by raising interest rates, the central bank policy will result in ___________ in private investment spending. This is also known as the ________ effect.
Business
1 answer:
oksian1 [2.3K]3 years ago
6 0

Answer:

decrease

crowding out effect

Explanation:

Crowding out effect determined the impact of government spending either on the supply side or demand side.

Due to spending increased by the government, prices are raised and real interest rate is charged. Investment is one of the function of real interest rate, but increase in the interest rate causes the decrease in the investment value. This decrease in the investment is known as the crowding effect.

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increases in government spending are not very effective in offsetting real shocks because they shift the:
yulyashka [42]

Increases in government spending are not very effective in offsetting real shocks because they shift the aggregate demand.

<h2>Definition of Aggregate Demand</h2>

Aggregate demand is the value of all requests for all types of goods and services produced in a certain period. The demand value contained in this aggregate will be expressed in terms of the overall value used for these goods and services up to a more specific price level and at a certain time period.

Some things that include aggregate demand are all consumer goods, capital goods used for the production process, import-export activities, and state government spending programs. Each of these variables will be considered the same as long as they are traded at the same market value.

This aggregate demand can also be calculated over a long period of time, which is often referred to as GDP or Gross Domestic demand. If this GDP will describe the total value and also the goods produced, then aggregate demand will represent the desire for goods and services.

Learn more about aggregate demand at brainly.com/question/29349235.

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5 0
1 year ago
Victor teaches science at the local high school. Sandra, the art teacher, fell sick and was going to be out of school for a coup
shepuryov [24]

Answer: B

Explanation: Victor had a certification in science and was not certified in art

4 0
3 years ago
Rollo is a member of smooth operators llc, a limousine service. rollo’s relationship to smooth operators ends, but the firm cont
JulsSmile [24]

Rollo is a member of smooth operators llc, a limousine service. rollo’s relationship to smooth operators ends, but the firm continues to do business. this is dissociation.

One way the mind deals with too much stress, such as during a traumatic experience, is through dissociation. Dissociation experiences can last for a very short period of time (hours or days) or for a very lengthy period of time (weeks or months). You could acquire a dissociative disorder if you disassociate for a prolonged period of time, especially if you're young.

Everyone has gone through this process before. Daydreaming, highway hypnosis, or "getting lost" in a book or movie are all instances of mild, everyday dissociation that include "losing touch" with awareness of one's immediate surroundings.

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4 0
2 years ago
how could Government intervention to minimise affects of lack of demand in the tourism and international education sector of Aus
BlackZzzverrR [31]

<u>Explanation:</u>

The government reduces regulations on tourism activities. Tourism related companies are encouraged to establish their business in a better way by reducing the interest rates for these business. The government also funds tourism related activities such as trade events. funding is also provided for events, concerts, festivals and permanent visitor attractions that can be set.

To develop the international education sector Australian government has kept the education sectors open for business.Global networking is done by government to take international students and provide education facilities.

8 0
3 years ago
g Your savings account earns 1.72% interest. You have $3,000 left over from an internship that you will put into the saving acco
bekas [8.4K]

Answer:

It will take 13 years and 66 days

Explanation:

Giving the following information:

Your savings account earns 1.72% interest.

Present value= $3,000

Final value= $3,756

To calculate the number of years, we need to use the following formula:

n= ln(FV/PV) / ln(1+i)

n= ln(3,756/3,000) / ln(1.0172)

n= 13.18 years

To be more specific= 365*0.18= 66

It will take 13 years and 66 days

4 0
4 years ago
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