The Crowding-Out Effect Describes How a Government Budget ________ ________

question 192

Multiple Choice

The crowding-out effect describes how a government budget ________ ________ the real interest rate and thereby ________ equilibrium investment.

• A) deficit; raises; decreases
• B) deficit; lowers; increases
• C) surplus; raises; decreases
• D) surplus; lowers; decreases
• E) deficit; lowers; decreases

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Definitions:

Multinational Corporation

A corporation doing business in more than one country; often it owns production facilities in at least one country and sells in many countries.

Standard Oil Trust

A conglomerate of interconnected oil companies controlled by John D. Rockefeller in the late 19th and early 20th centuries, known for its monopolistic practices.

Exxon

An American multinational oil and gas corporation, one of the world's largest publicly traded energy providers and chemical manufacturers.

Mobil

An American oil company now merged with Exxon to form ExxonMobil, one of the world's largest publicly traded international oil and gas companies.