The Crowding-In Effect Depends on the Sensitivity of Investment to

question 27

Multiple Choice

The crowding-in effect depends on the sensitivity of investment to

• A)GDP, as does the crowding-out effect.
• B)interest rates, whereas the crowding-out effect depends on the sensitivity of investment to GDP.
• C)interest rates, as does the crowding-out effect.
• D)GDP, whereas the crowding-out effect depends on the sensitivity of investment to interest rates.

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Definitions:

Imperfect Competitor

An imperfect competitor is a firm or entity in a market structure that does not meet the criteria of perfect competition, often having some control over its prices or products.

Wage Rate

An amount of money that is paid to an employee per unit of time, commonly hourly, daily, or annually, for their labor.

Standard Oil

An American oil producing, transporting, refining, and marketing company. Established in 1870 by John D. Rockefeller and associates, controlling much of the oil industry in the U.S. until it was broken up in 1911.

Trust

A legal arrangement where one party, the trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary.