"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.

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Definitions:

Note Receivable

A written promise for amounts to be received by a business, typically including interest, from another party.

Note Payable

A written promise to pay a certain sum of money on a specified future date, which is a liability on a company's balance sheet.

Specified Amount

An exact or particular amount that has been agreed upon or is required within a certain agreement or context.

Written-off

The accounting practice of recognizing that an asset or receivable no longer has value and is unlikely to be collected.