The Crowding Out Effect Is Caused by

question 28

Multiple Choice

The crowding out effect is caused by

• A)an increase in the money supply, which increases the demand for goods and services, and thus crowds out investment.
• B)an increase in government purchases, which reduces the demand for goods and services, and thus crowds out investment.
• C)an increase in consumer income, which increases the demand for goods and services, and thus crowds out investment.
• D)an increase in government purchases, which increases the demand for goods and services, and thus crowds out investment.

---

Definitions:

Functional Conflict

Results in positive benefits to the group.

Creativity

Creativity involves the use of imagination or original ideas to create something; it is a fundamental process in innovation.

Manifest Conflict

The visible and explicit display of disagreement, competition, or antagonism between individuals or groups.

Expressed Openly

The act of sharing thoughts, feelings, or opinions in a straightforward and uninhibited manner.