The Crowding-Out Effect Refers to the Possibility That Deficit Spending

question 173

True/False

The crowding-out effect refers to the possibility that deficit spending may motivate people to increase
their saving in anticipation of higher future taxes.

---

Definitions:

Secured Bonds

Bonds that are backed by specific collateral that must be forfeited in the event that the issuing firm defaults.

Junk Bonds

High-yield, high-risk securities issued by corporations or municipalities considered to be at greater risk of default.