The Crowding-Out Effect Refers To

question 20

Multiple Choice

The crowding-out effect refers to:

• A) higher interest rates and reduced private spending that results from financing federal budget deficits.
• B) higher future taxes accompanying budget deficits to reduce private consumption.
• C) the inflation rate to rise when the unemployment rate is low.
• D) increases in private savings to reduce interest rates and, thereby, crowd-out government

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Definitions:

Innocent Representation

A truthful statement or declaration made without the intent to deceive, typically relevant in contracts or negotiations.

Mistake Of Law

An error made by a person in understanding the law as it pertains to their actions or a situation.

Reasonable Reliance

The dependence by one party on the representations or promises of another where such reliance is logically or legally justifiable.

Material Fact

Information that is significant enough to influence a decision, especially pertinent in contract and disclosure laws.