Crowding Out Can Best Be Defined as

question 50

Multiple Choice

Crowding out can best be defined as

• A)private investment increases growth rates and decreases deficits.
• B)restrictive monetary policy raises interest rates and decreases investment.
• C)government deficits increase interest rates and decrease investment.
• D)consumption spending increases interest rates and decreases investment.

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Definitions:

Derivatives

Financial instruments whose value is based on the price movements of an underlying asset, such as stocks, bonds, or commodities.

SEC

The U.S. Securities and Exchange Commission, an agency that oversees and regulates the securities industry and protects investors by ensuring that the securities markets operate fairly and transparently.

Leveraged Buyout (LBO)

A financial transaction where a company is purchased with a combination of equity and significant amounts of borrowed money, using the company's assets as collateral.

Junk Bonds

Bonds with high risk but also a high rate of return.