The crowding out of private spending by government spending will be greater the
A) less sensitive consumption, investment, and net exports are to changes in the price level.
B) less sensitive consumption, investment, and net exports are to changes in interest rates.
C) more sensitive consumption, investment, and net exports are to changes in interest rates.
D) more sensitive consumption, investment, and net exports are to changes in the price level.
Question 2
Not enforcing property rights in an economy will
A) lower the level of investment. B) raise the level of investment.
C) not change the level of investment. D) cause the market system to work efficiently.
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Growth of Government Spending, 1870–2009