The "Crowding-Out Effect" Suggests That

question 152

Multiple Choice

The "crowding-out effect" suggests that:

• A)the economy's productive capacity will reduce.
• B)imports are replacing domestic production.
• C)private investment is increasing at the expense of government spending.
• D)investment is increasing at the expense of consumption.

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Definitions:

Artificially Scarce Good

A product or service whose supply is intentionally restricted to increase its price or value, often contrary to its natural abundance.

Pay-Per-View

A service by which viewers can purchase events to be viewed on television and pay for the private telecast of that event to their homes.

External Cost

Costs incurred by a third party due to an economic activity but not accounted for by the producer or consumer.

Marginal Costs

An additional delineation of the expenses incurred in the production of one more unit of a product.