Crowding Out Occurs

question 124

Multiple Choice

Crowding out occurs

• A) when an increase in government spending crowds out tax revenues.
• B) when an increase in government spending increases investment spending.
• C) when an increase in government spending crowds out bonds.
• D) when an increase in government spending crowds out other types of spending.
• E) when an increase in government spending crowds out the money supply.

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Definitions:

Legally Liable

The state of being legally responsible for something, typically involving a financial or other obligation.

Sole Proprietorship

A business structure where a single individual owns, manages, and is responsible for all aspects of the business.

Business Owner

An individual who legally possesses a company, bearing both the risks and benefits associated with the enterprise.

Separate Entity

A concept in accounting and law where a business is recognized as having its own legal rights and obligations, distinct from those of its owners or members.