Question : The concept of "crowding-out effect" in the government budget refers to:

Option 1: A decrease in private investment due to increased government expenditure

Option 2: An increase in private investment due to decreased government expenditure

Option 3: A decrease in government expenditure due to increased private investment

Option 4: An increase in government expenditure due to decreased private investment

Question : The crowding-out effect suggests that an increase in government expenditure leads to:

Option 1: A decrease in private investment
  

Option 2: An increase in private investment
 

Option 3: No change in private investment

Option 4: An increase in savings

Question : The wealth effect suggests that an increase in the price level leads to:

Option 1: A decrease in consumption expenditure
 

Option 2: An increase in consumption expenditure
 

Option 3: A decrease in investment expenditure

Option 4: An increase in investment expenditure

Question : The multiplier effect refers to the:

Option 1: Increase in consumption due to an increase in income
  

Option 2: Increase in investment due to an increase in consumption
    

Option 3: Increase in income due to an increase in investment

Option 4: Increase in income due to an initial change in spending

Question : The multiplier effect refers to:

Option 1: The magnification of changes in autonomous expenditure on real GDP
 

Option 2: The decrease in consumption as income increases
    

Option 3: The decrease in investment as interest rates rise

Option 4: The increase in government expenditure during a recession