60) The crowding-out effect of deficit spending says that as deficits rise, what will occur?

a decrease in interest rates and a decrease in consumption and investment

an increase in interest rates and a decrease in consumption and investment

a decrease in interest rates and an increase in consumption and investment

an increase in interest rates and an increase in consumption and investment

62) The sale of Treasury bills by the Federal Reserve monetizes the federal debt.

False

True

64) The crowding-out effect is most prominent during times of rapid economic growth.

False

True

66) Suppose a country has full employment and price stability if the unemployment rate is 4% to 5%, inflation runs at 2% to 3%, and real GDP grows at a rate of 2.25% to 3% per year. If the federal deficit was $3 trillion, economic growth was 2%, and the unemployment rate was 10%, a functional finance economist would suggest increasing taxes in order to balance the budget.

True

False

68) Interest on the national debt is an example of discretionary spending.

True

False