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:

Developing

A term often used to describe countries or regions with a lower level of industrialization, economic development, and lower standard of living compared to more developed countries.

Traditional Civil Rights Organizations

Groups and organizations that have historically worked towards the legal recognition and protection of the civil rights of individuals, particularly marginalized communities.

Legal Segregation

The enforced separation of different racial groups within a country, community, or establishment by law, historically prominent in the United States as Jim Crow laws.

American Indian Movement

A grassroots movement founded in 1968 focused on civil rights for Native Americans, aiming to address issues of sovereignty, treaty rights, and cultural preservation.