The Decrease in Consumption and Investment Interest-Related Spending That Occurs

question 45

Multiple Choice

The decrease in consumption and investment interest-related spending that occurs when the interest rate rises as government spending increases is called:

• A)crowding in.
• B)crowding out.
• C)neutral.
• D)none of the above.

---

Definitions:

Initial Registration

The process through which a company files necessary documents with the Securities and Exchange Commission (SEC) for its securities to be offered to the public for the first time.

Margin Call

A demand by a broker for an investor to deposit additional funds or securities to maintain the required minimum margin account balance.

Short Sale

A transaction where an investor borrows a security and sells it on the open market, planning to buy it back later at a lower price.

Maintenance Margin

The minimum amount of equity that must be maintained in a margin account after a purchase has been made, to continuing holding the position.