Refer to the Above Graph

question 87

Multiple Choice

Refer to the above graph.The crowding-out effect would be illustrated by a:

• A)shift from curve A to curve B leading to a decrease in investment.
• B)shift from curve B to curve A leading to a decrease in interest rates.
• C)movement from point 1 to point 2 on curve A leading to a decrease in investment.
• D)movement from point 2 to point 1 on curve A leading to a decrease in investment.

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Definitions:

Taxed

To impose a financial charge or levy upon an individual or entity by a governmental organization.

Corporate Level

Refers to the highest level of strategic decision-making and planning in a business organization.

Primary Market

The financial market where new securities are issued and sold by companies and governments for the first time.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership such as options or warrants.