Complete Crowding Out Occurs When

question 33

Multiple Choice

Complete crowding out occurs when

• A)monetary policy has no effect on income.
• B)fiscal policy has no effect on income.
• C)monetary policy has no effect on interest rates.
• D)fiscal policy has no effect on interest rates.

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Definitions:

Dividends

Disbursements from a company to its owners, typically representing a share of the earnings.

Short-term Speculation

Financial transactions or investments made with the expectation of significant returns in a short period, often characterized by high risk.

Available-for-sale Debt Portfolio

Debt securities that are not classified as held-to-maturity or trading securities, and can be sold in response to needs for liquidity or changes in interest rates.

Unrealized Loss

A loss that results from holding onto an asset that has decreased in value, but has not yet been sold or liquidated.