The Crowding-Out Effect Refers to the Tendency of

question 42

Multiple Choice

The crowding-out effect refers to the tendency of

• A) the additional borrowing accompanying larger budget deficits to increase interest rates and reduce private spending.
• 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 expenditures.

---

Definitions:

Name

A word or set of words by which a person, place, or thing is known, addressed, or referred to.

Leaf Litter Layer

The top layer of the forest floor covered by decomposing leaves, twigs, animal feces, and other organic materials.

Soil Horizon

A layer parallel to the soil surface, whose physical characteristics differ from the layers above and beneath.

Surface

The outermost or uppermost layer of something, often referring to land, a body of water, or a solid object.