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kati45 [8]
3 years ago
9

Which of the following will be most likely to dampen the expansionary effects of an increase in government spending financed by

borrowing?
a. The additional borrowing will cause the central bank to buy more bonds, which will reduce aggregate demand.
b. The increase in demand for loanable funds as the result of borrowing will cause interest rates to rise and private investment to fall.
c. The increase in government spending will cause the money supply to expand, thereby causing an inflationary boom.
d. The budget deficit will cause business decision makers to become more optimistic.
Social Studies
1 answer:
Montano1993 [528]3 years ago
4 0

Answer:B) The increase in demand for loanable funds as the result of borrowing will cause interest rates to rise and private investment to fall.

Explanation:

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Answer:

(d) Inertia

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3 years ago
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Answer:

The cross-price elasticity is - 0.8.

Explanation:

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The cross-price elasticity of demand measures the change in the demand for a product due to a change in the price of a related good. Negative cross-price elasticity means the goods are complements. Positive cross-price elasticity implies that the goods are substitutes.

Cross price elasticity  

= \frac{\Delta Qy}{\Delta Px}

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The cross price elasticity is negative which means that the goods are complements.

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Answer:

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3 0
3 years ago
Read 2 more answers
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