The Crowding-Out Effect Tends to Be Stronger When the Economy

question 159

Multiple Choice

The crowding-out effect tends to be stronger when the economy

• A)has a lot of excess productive capacity.
• B)is at, or close to, full employment.
• C)has a very small net exports or foreign sector.
• D)is a very open economy with a large foreign sector.Topic: Problems, Criticisms, and Complications of Implementing Fiscal Policy

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Definitions:

Periodic Rate

The interest rate for a specific period of time, often related to credit cards or loans, which can be monthly, quarterly, etc.

APR

Annual Percentage Rate, a measure of the cost of credit, expressing the yearly interest rate.

Total Interest

The total amount paid or earned over the life of a financial product, such as a loan or an investment, in addition to the principal.

APR

Annual Percentage Rate, a measure used to calculate the cost of borrowing or the yield from an investment, taking into account interest rates, fees, and loan terms.