An Example of Crowding-Out Would Be the

question 25

Multiple Choice

An example of crowding-out would be the

• A) demand-pull inflation government spending creates.
• B) loss of private investment resulting from federal deficits reducing the availability of loan funds.
• C) impact of social spending competing with military spending.
• D) way in which federal spending squeezes out state and local government spending.

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Definitions:

Compounded Annually

A method of calculating interest in which the interest is added to the principal at the end of each year, then new interest is calculated on the total for the next period.

Present Value

The now-value of a prospective sum of money or cash flow sequence, according to a certain rate of return.

Rate of Return

The financial outcome, either positive or negative, of an investment within a set period, delineated as a proportion of the investment’s initial outlay.

Interest Rate

The percentage charged on a loan or paid on deposits over a period of time, often annually.