The Crowding Out Effect of Government Borrowing Refers to a Decrease

question 2

Multiple Choice

The crowding out effect of government borrowing refers to a decrease in:

• A) private consumption only.
• B) private investment only.
• C) both private consumption and private investment.
• D) neither private consumption nor private investment.

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Definitions:

Expected Shortage

Expected shortage refers to the anticipated shortfall in inventory due to higher demand than the supply available.

Inventory Stock

The quantity of goods or materials a business holds for the purpose of resale or production.

Product Availability

The state of a product being in stock and accessible for purchase by consumers.

Customer Order

A request made by a customer to purchase goods or services from a business.