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:

Experimental Group

In research, the group of participants that receives the treatment or intervention being tested, as opposed to the control group which does not.

Depressive Symptoms

Manifestations of depression which can include feelings of sadness, hopelessness, loss of interest in activities, and changes in appetite or sleep.

Cross-Sectional Group

A research method that involves analyzing data from a population, or a representative subset, at a particular point in time.

Statistically Significant

A term denoting that the likelihood that a relationship between two or more variables is caused by something other than random chance is high enough to be considered notable.