The Crowding-Out Effect Refers to Which of the Following

question 151

Multiple Choice

The crowding-out effect refers to which of the following?

• A) reductions in aggregate demand that occur as the government enacts a fiscal policy that is intended to eliminate an inflationary gap
• B) price increases that result in less purchasing power for consumers
• C) increases in consumption spending that leave fewer resources available for the economy to use to create capital
• D) reductions in private investment spending that offset increases in other spending

---

Definitions:

Self-Actualization Needs

Self-actualization needs represent the highest level in Maslow's hierarchy of needs, referring to the fulfillment of personal potential and self-development pursuits.

Maslow Hierarchy

A theory of psychological health predicated on fulfilling innate human needs in priority, culminating in self-actualization.

Maslow Hierarchy

A theory in psychology proposing that people are motivated by five basic categories of needs: physiological, safety, love, esteem, and self-actualization.

Level Of Needs

Refers to the hierarchy of human needs ranging from basic physiological ones to self-fulfillment, as per Abraham Maslow's theory.