Which of the Following Best Describes Crowding In

question 34

Multiple Choice

Which of the following best describes crowding in?  

• A) when current budget deficits allow for future fiscal policy initiatives 
• B) the potential for government spending to stimulate private investment in an otherwise dead economy 
• C) the displacement of interest-sensitive private investment that occurs when higher government deficits drive up market interest rates 
• D) when budget deficits help to increase tax revenues

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Definitions:

Bonds Payable

A financial accounting term for the value of bonds that a company is obligated to pay back at some future point.

Preferred Stock

A class of stock with preferential rights over common stock.

Current Ratio

A financial metric that assesses a firm's capacity to meet its short-term liabilities, which are due within a year, by dividing its current assets by its current liabilities.

Financial Information

Data regarding the financial status or performance of an entity, including income statements, balance sheets, and cash flow statements.