As a Result of the Government's Rescue of Financial Firms

question 25

Multiple Choice

As a result of the government's rescue of financial firms and the auto industry in 2008, which of the following occurred?
i. The government's demand for loanable funds increased the real interest rate.
ii. Investment expenditures were crowded out.
iii. The supply of loanable funds curve shifted leftward.

• A) i and ii.
• B) i, ii and iii.
• C) i only.
• D) ii only.
• E) ii and iii.

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Definitions:

Private Costs

Private costs are the direct costs incurred by individuals or companies as a result of their own production or consumption activities, excluding any external or social costs.

Environmental Costs

Expenses incurred by a company related to the environmental impact of its operations, including waste management, emissions control, and resource conservation.

Conventional

Pertaining to standard or traditional practices, methods, or systems commonly accepted and utilized.

Hidden Environmental Costs

Hidden Environmental Costs are the indirect, often not immediately apparent expenses related to environmental degradation and resource depletion caused by business activities.