The "Crowding-Out Effect" Refers to How a Government Budget Deficit

question 193

Multiple Choice

The "crowding-out effect" refers to how a government budget deficit

• A) shifts only the supply of loanable funds curve leftward.
• B) shifts only the demand for loanable funds curve leftward.
• C) shifts both the demand for and the supply of loanable funds curves leftward.
• D) decreases the equilibrium quantity of investment.
• E) increases the equilibrium quantity of investment.

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Definitions:

Riparian Rights

Legal rights of property owners to use and access water from a river, stream, or other body flowing through or adjacent to their land.

Privatization

The transfer of ownership or operation of a property or business from the government to private individuals or organizations.

Commodification

The process of treating something that was not previously considered as a sellable product as if it can be bought and sold in a market.

Subsidization

The provision of financial assistance or support by a government or organization to lower the cost of services or commodities.