An Illustration of "Crowding Out" in Macroeconomics Is Best Provided

question 123

Multiple Choice

An illustration of "crowding out" in macroeconomics is best provided by

• A)a decrease in government subsidies for low-cost housing causes an increase in private spending on housing.
• B)a decrease in the money supply decreases nominal GDP.
• C)an increase in tariffs causes a decrease in imports.
• D)an increase in the money supply crowds out the issuance of privately held debt.
• E)a fiscal expansion raises interest rates and thereby lowers private investment.

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Definitions:

Traditional Values

Socially inherited norms and beliefs that are passed down through generations, typically emphasizing family roles, religion, and moral views.

Equity Theory

A theory of motivation that suggests fairness in the balance between an individual's inputs and outputs in a relationship contributes to their satisfaction.

Social Exchange Theory

A theory that suggests social behavior is the result of an exchange process aiming to maximize benefits and minimize costs.

Attachment Theory

A psychological model that describes the dynamics of long-term and short-term interpersonal relationships between humans.