Which of the Following Provides an Example of "Crowding Out

question 2

Multiple Choice

Which of the following provides an example of "crowding out"?

• A) Increases in government purchases cause more government borrowing, which decreases the funds that are available for private investors to borrow in the loanable funds markets.
• B) Increases in the interest rate cause people to spend more.
• C) Increases in the money supply lead to higher spending, which crowds out unemployment.
• D) Decreases in taxes cause the government to borrow more, which reduces interest rates in the loanable funds markets.

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Definitions:

Store Owner

An individual who owns and operates a retail business, responsible for the strategic and day-to-day decisions of the store.

Productive Day

A day in which a significant amount of work or tasks are completed effectively, often contributing positively to personal or business goals.

Net Profits

The amount of income that remains after subtracting all expenses, taxes, and costs from total revenue.

Typical Day

A representation of a common or average day in a specific context, often used to illustrate the routine or daily activities of an individual or process.