The Crowding-Out Effect Recognizes That If the Government Sells Bonds

question 90

Multiple Choice

The crowding-out effect recognizes that if the government sells bonds to finance spending, it can cause interest rates to _____ consumer spending and investment.

• A) fall, thereby reducing
• B) fall, thereby stimulating
• C) rise, thereby reducing
• D) rise, thereby stimulating

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Definitions:

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The administration of business practices to create the highest level of efficiency possible within an organization, focusing on converting materials and labor into goods and services as efficiently as possible.

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