Which of the Following Components of Aggregate Expenditure Is Most

question 39

Multiple Choice

Which of the following components of aggregate expenditure is most subject to crowding out?

• A)Consumption expenditures
• B)Investment spending
• C)Imports
• D)Government purchases of goods and services
• E)National saving

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Definitions:

Strategic Behavior

Actions taken by firms or individuals that consider the anticipated reactions or responses of other firms or individuals.

Collusive Oligopoly

A market situation where a small number of firms agree, explicitly or implicitly, to control prices, market share, or other competitive dimensions, reducing or eliminating competition.

Contestable Market Model

An economic concept that describes a market with free entry and exit, where a company's prices and output levels are constrained by the threat of potential competition.

Price-Leadership Model

A market strategy where a leading firm sets prices that other firms in the industry then follow, influencing the pricing practices across the market.