1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Virty [35]
3 years ago
5

a. How can increases in government spending crowd out investment spending? An increase in government spending increases the use

of automatic stabilizers, which reduces private investment spending. causes firms to worry about inflation, which reduces private investment spending. increases the real interest rate, which reduces private investment spending. lowers the real interest rate, which reduces private investment spending. b. Is crowding out a major concern when actual output is below potential output? Why? Crowding out is a major concern, because the goal is always to increase investment spending. is not a major concern, because the Fed will likely lower the real interest rate when actual output is far below potential. is a major concern, because the crowding out effect will outweigh the increase in government spending. is not a major concern, because the Fed will likely raise the real interest rate when actual output is above potential output.
Business
1 answer:
Delvig [45]3 years ago
4 0

Answer:

         a.  increases the real interest rate, which reduces private investment spending.

        b.  is not a major concern, because the Fed will likely lower the real interest rate when actual output is far below potential.

Explanation:

Increase in government spending means that the government would probably have to borrow money from the credit market. Because the government is so large, it will borrow in large amounts which would force rates to rise. At these higher rates, the private sector might find it too expensive to borrow money and so would be crowed out such that they reduce their investment spending.

When the economy is facing an output that is lower than potential, the Fed will engage in monetary policy aimed at reducing interest rates to improve investment spending. This therefore negates the effect of crowing out which means that it would no longer be a major concern.

You might be interested in
A sole proprietorship:
vovangra [49]

Answer:

D. has its profits taxed as personal income.

Explanation:

Characteristics of a sole proprietorship :

1. It Is Owned by one person

2. The onwer has an unlimited liability.

3. It doesn't usually have an unlimited life. It usually ends with the death of the owner.

4. Profits are taxed as personal income. 

5. It is very easy to form. It requires little legal cost.

3 0
3 years ago
Assume that you have a three-year-old daughter and you have come to appreciate the power of saving and investing. Can you open u
aliya0001 [1]

Answer:

No.

You cannot open up and put money into a Roth IRA in your child's name.

Explanation:

The IRS allows that any child, regardless of age, can contribute to an IRA if they have earned income.  This means that only a child that has earned income can have an IRA opened for him or her.  As the child is still underage, the IRA must be set up as a custodial account by the parent or another adult. This implies that the child cannot operate the account during the period she is underage but can have money saved in the account from her earned income.

4 0
3 years ago
Preferred stock has a feature that allows it to share with common shareholders in any dividends paid in excess of the percent or
____ [38]

Answer:

Participating

Explanation:

Preferred stock has a feature that allows it to share with common shareholders in any dividends paid in excess of the percent or dollar amount stated on the preferred stock. This feature is called: PARTICIPATING PREFERRED STOCK

This is because Participatory preferred stock gives an extra profit assurance to stockholders. Typically, all preferred stocks have a fixed dividend rate, which is the main benefit.

However, in the event where the issuing company meets specific financial targets, holders of participating stocks will get more dividend payments above the normal fixed rate.

8 0
3 years ago
Economists who view the AS curve as upward-sloping believe that changes on the demand side _______ result in changes in Real GDP
Yanka [14]

Answer:

May; cannot do anything

Explanation:

In the short run, the aggregate supply curve will react to price level, which means it is upward sloping rather than vertical. If the price level increases, quantity supplied will increase. If the price level decreases, the quantity supplied will decrease.

5 0
3 years ago
Read 2 more answers
During August, Boxer Company sells $348,000 in merchandise that has a one year warranty. Experience shows that warranty expenses
9966 [12]

Answer:

Dr Estimated Warranty Liability $8,600

Cr               Spare Parts Inventory  $8,600

Explanation:

The estimated warranty claim is worth $7,600 which means that the warranty claim must be debited by this amount as it was previously forecasted to be at $11,000 and in this month, the claim was worth $7,600. So decrease in warranty liability is necessary. Furthermore, the Spare Parts Inventory would be credited as the Spare parts would be used to fix the inventory which must be of $7,600 in value.

The double entry to record Warranty Repairs would be as under:

Dr Estimated Warranty Liability $8,600

Cr               Spare Parts Inventory  $8,600

3 0
3 years ago
Other questions:
  • The law of diminishing returns is often used to analyze the ideal amount of which factor of production?
    8·2 answers
  • Clarespharm, a pharmaceutical company, wants to be the market leader in the country of Jefnamia by the end of the next fiscal ye
    11·1 answer
  • Which of the following is an incorrect way to avoid struck-by rolling hazards?
    12·2 answers
  • When conducting a threat assessment an organization should determine? Which threats requires the least expenditure to prevent. W
    13·1 answer
  • What might happen to a product when supply is low? A. The price will go up. B. The price will go down. C. The price will stay th
    12·1 answer
  • North Company has completed all of its operating budgets. The sales budget for the year shows 50,160 units and total sales of $2
    5·1 answer
  • A bank money manager estimates that the bank will experience a liquidity deficit of $400 million with a probability of 10 percen
    9·1 answer
  • Stazia Inc is a software company that intends to collaborate with Softron Inc, another multinational company. Steve, the chief e
    13·2 answers
  • On September 1, 2018, Able Company purchased a building from Regal Corporation by paying $580,000 cash and issuing a one-year no
    6·1 answer
  • before creating a social media advertising campaign, sarah embeds quantitative and qualitative metrics at the onset of her strat
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!