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.

---

Definitions:

Dissolved

The process of legally dissolving a corporation or partnership, effectively ending its existence.

Close Corporation

A business structure characterized by a small number of shareholders, no need for formal board meetings, and less stringent regulatory requirements.

Managerial Control

A theory of corporate management that favors insulating managers from shareholders by limiting the shareholders’ power to vote and by making it difficult for the shareholder to sue managers.

Outstanding Shares

Represents the total number of shares of a corporation's stock that are currently owned by all shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s insiders.