The Crowding-Out Effect Implies That a

question 56

Multiple Choice

The crowding-out effect implies that a

• A) budget surplus will be highly effective against inflation.
• B) budget deficit is likely to stimulate aggregate demand and cause inflation.
• C) budget deficit will increase real interest rates and, thereby, retard private spending.
• D) budget surplus will retard aggregate demand and throw the economy into a downward spiral.

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Definitions:

Service Department

A segment within a business that provides services, support, or maintenance to other departments or to the business's customers.

Surgery Department

A specialized department within a hospital where surgical procedures are performed.

Computer Workstations

High-performance computers designed for technical or scientific applications, often used in professional contexts.

Employees

Individuals who are hired by a company or organization to perform specific duties and tasks in exchange for compensation.