Which of the Following Best Explains the Crowding-Out Effect

question 79

Multiple Choice

Which of the following best explains the crowding-out effect?

• A) the decrease in the supply of loanable funds that results from an increase in budget deficits
• B) an increase in consumption amongst households that crowds out savings
• C) the decrease in investment opportunities for small businesses resulting from increased borrowing by larger corporations
• D) the decrease in investment from higher interest rates that results from increased government borrowing to finance larger budget deficits

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Definitions:

Children's Language Skills

The developmental abilities in children to understand and use language for communication, including vocabulary, grammar, and conversational abilities.

Path Analysis

A specialized type of structural equation modeling used to analyze directed networks of relationships between variables.

Direction of Relationship

Indicates whether the relationship between two variables is positive or negative.

Factors

Variables that are manipulated or measured in experimental research to observe their effect on the outcome.