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:

Low-Cost Strategy

A competitive strategy where a company offers products or services at a lower price than competitors, focusing on efficiency and cost minimization.

Cost-Based Advantages

Competitive benefits derived from being able to operate at a lower cost compared to competitors, allowing for better pricing strategies or profit margins.

Activities

Tasks or actions that are carried out as part of a process or to achieve an objective.

Organic Organization

A flexible, adaptable organizational structure with less emphasis on hierarchy and more on decentralized decision making and collaboration.