The Crowding- in Effect Implies That a Decrease in Government

question 81

Multiple Choice

The crowding- in effect implies that a decrease in government purchases causes:

• A) interest rates to rise, which increases investment.
• B) interest rates to fall, which increases investment.
• C) interest rates to fall, which decreases investment.
• D) interest rates to rise, which decreases investment.

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Definitions:

C2B

Consumer-to-Business, a business model where consumers create value or products that businesses purchase.

B2B

Business-to-Business, a model that involves transactions between two firms rather than between a firm and individual consumers.

Ordering Cost

The expenses incurred in placing and receiving orders for materials or products, including paperwork, communication, and transportation costs.

Idle Workers

Employees who are not actively engaged in production or work due to lacking assignments or efficiency breakdowns.