The Crowding-Out Effect of Higher Interest Rates Can Be Avoided

question 3

Multiple Choice

The crowding-out effect of higher interest rates can be avoided by

• A)expansionary monetary policy.
• B)expansionary fiscal policy.
• C)contractionary monetary policy.
• D)decreasing taxes.

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Definitions:

Algeria

A North African country with a rich history that was a French colony from 1830 until it achieved independence in 1962.

Nuclear Power

The use of nuclear reactions that release nuclear energy to generate heat, which most frequently is then used in steam turbines to produce electricity in a nuclear power plant.

Soviet Union

A former socialist state that existed from 1922 to 1991, comprised of Russia and several surrounding countries, known for its role in global politics during the 20th century.

Britain

A country located off the northwestern coast of mainland Europe, comprising England, Scotland, and Wales.