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:

Punishment

A method used to reduce undesirable behavior by applying a negative consequence or removing a positive stimulus following the behavior.

Extinction

In the context of behavioral psychology, it refers to the gradual weakening and eventual disappearance of a conditioned response when it is no longer reinforced.

Behaviorist Approach

A learning theory that focuses on observable behaviors and the ways they're learned, emphasizing the importance of external stimuli and reinforcement.

Observable Behavior

Refers to actions or reactions of an individual or system that are visible and measurable.