Which of the Following Is an Effect of Crowding Out

question 71

Multiple Choice

Which of the following is an effect of crowding out?

• A) A reduction in the size of the government de?cit.
• B) An increase in private investment.
• C) A fall in the cost of private debt.
• D) A reduction in the size of the multiplier.

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Definitions:

Interest Rates

The proportion of a loan charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Price Mechanism

The system by which the forces of supply and demand determine the prices of goods and services.

Usury Laws

Regulations governing the maximum interest rates that can be charged on loans, intended to protect consumers from excessively high rates.

Usury Law

Legislation that sets the maximum interest rates that can be charged on loans, intended to protect consumers from excessively high rates.