"Crowding Out" Is the Theory That an Increase in Our

question 21

Multiple Choice

"Crowding out" is the theory that an increase in our federal government's budget deficit will likely:

• A) decrease the national debt.
• B) decrease interest rates.
• C) decrease borrowing by households and businesses
• D) increase the impact of the spending multiplier.

---

Definitions:

Economic Situation

The state of the economy at a specific time, including factors like employment, GDP, inflation rates, and market health.

Farmers' Alliance

A broad mass movement in the rural United States during the late 19th century, which sought to improve the economic conditions for farmers through the creation of cooperatives and political advocacy.

Federal Troops

Military forces deployed by the federal government of a nation, often used to denote soldiers sent to enforce laws within the country, including during periods of civil unrest.