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Author Question: Define risk-loving behavior. What will be an ideal response?[br][br][b][color=#7BCCB5]Question ... (Read 82 times)

RODY.ELKHALIL

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on: Jun 29, 2018
Define risk-loving behavior.
 
  What will be an ideal response?

Question 2

What is meant by crowding out? Explain the difference between crowding out in the short run and in the long run.
 
  What will be an ideal response?


shailee

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Reply #1 on: Jun 29, 2018
Answer to Question 1

It refers to a person's preference for an uncertain deal over a certain deal with an equal expected value.

Answer to Question 2

Crowding out refers to a decline in private expenditures  consumption, investment, and net exports  as a result of an increase in government purchases. In the short run, an increase in government purchases results in partial crowding out of private expenditures, but in the long run, a permanent increase in government purchases results in the complete crowding out of private expenditures.


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