The Crowding Out Effect Refers to the ________ from ________

question 59

Multiple Choice

The crowding out effect refers to the ________ from ________ in the government's budget deficit.

• A) decrease in investment; an increase
• B) decrease in employment; an increase
• C) decrease in consumption; an increase
• D) increase in consumption; an increase
• E) increase in investment; an increase

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Definitions:

Marginal Cost

The additional cost incurred by producing one more unit of a product, reflecting the cost of the resources used in the production of that extra unit.

Patent

A governmental right granted to an inventor, giving the exclusive right to make, use, sell, and import an invention for a certain period of time.

Marginal Cost

The cost added by producing one additional unit of a product or service, an important concept in economics for determining the optimal level of production.

Monopolist

A single firm or entity that is the exclusive provider of a good or service, thus controlling its market price.