Crowding Out Occurs When the Federal Government

question 36

Multiple Choice

Crowding out occurs when the federal government:

• A) raises taxes to finance a budget deficit.
• B) refinances maturing U.S. Treasury bonds.
• C) borrows by selling bonds to finance a deficit.
• D) uses a budget surplus to pay off part of the national debt.

---

Definitions:

Turnover

Sales divided by average operating assets.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, expressed as a percentage.

Net Operating Income

The total profit of a company after operating expenses are subtracted from gross profit but before income taxes and interest expenses are deducted.

Average Operating Assets

The average value of assets used in the production or operation of a company over a specific period.