The Crowding-Out Effect of Borrowing to Finance the Public Debt

question 23

Multiple Choice

The crowding-out effect of borrowing to finance the public debt:

• A)decreases current spending for private investment.
• B)increases the privately owned stock of real capital.
• C)decreases the economic burden on future generations.
• D)increases incentives to work and save.

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Definitions:

Inflammatory Diseases

Disorders characterized by inflammation, which involves redness, swelling, pain, and sometimes loss of function, due to an immune response.

Alzheimer's Disease

A progressive neurodegenerative disorder characterized by memory loss, cognitive impairment, and changes in behavior, associated with an accumulation of amyloid plaques and neurofibrillary tangles in the brain.

Rheumatoid Arthritis

A chronic inflammatory disorder affecting joints, including those in the hands and feet, characterized by painful swelling leading to bone erosion and joint deformity.

Naphthalene

An aromatic hydrocarbon composed of two fused benzene rings, commonly found in mothballs and used in the production of dyes and plastics.