on 20 of 20 Sapling Learning Smità Ramnarain at University of Rhode island For each statement below, indicate if Iit is true or false by dragging the appropriate label to the box next to each item. 1. An increase in government spending can crowd out private investment. 2. Automatic stabilizers need to be approved by Congress before they can be implemented. 3. A Keynesian response to the\'crowding out argument is that government expenditure helps during recessions when private investment is low anyway. 4. Private investment is crowded out when interest rates fall due to increased government borrowing 5. Debt and deficit are the same idea. 6. The Ricardian equivalence idea is that private savings. Solution (Question 1 - Image 1) (1) TRUE Increased government spending increases budget deficit, so government resorts to borrowing for deficit financing. Higher borrowing increases interest rate, lowering private investment and crowding it out. (2) FALSE Automatic stabilizers (tax, transfer payments and government spending) are built-in into the economic system and do not need Congress approval. (3) TRUE Keynesian school of economics recommends government intervention during recession, by higher government spending and/or lower tax. (4) FALSE As explained in (1). (5) FALSE Deficit equals government spending in excess of tax revenue. Debt is the total amount of surplus and deficit accumulated over a period until date. (6) FALSE As per Ricardian equivalence, a budget deficit caused by higher government spending or lower tax in current period will lead to an increase in private saving. NOTE: As per Chegg Answering Policy, first question is answered..