Crowding Out Can Best Be Defined as

question 29

Multiple Choice

Crowding out can best be defined as

• A)higher interest rates caused by restrictive monetary policy, which reduces investment.
• B)higher interest rates caused by restrictive monetary policy, which increases saving and reduces consumption spending.
• C)government budget deficits causing a drop in private borrowing because of higher interest rates.
• D)government budget deficits causing a drop in interest rates, which reduces private saving.

---

Definitions:

Short-Term Debt

Financial obligations that are due for repayment within a short period, typically less than one year.

Operating Current Assets

are assets that are expected to be converted into cash or used up within one year in the course of business.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Inventory

The goods and materials a business holds for the purpose of resale, production, or repair.