Which of the Following Is "Crowded Out" by Higher Interest

question 75

Multiple Choice

Which of the following is "crowded out" by higher interest rates that can be the result of expansionary fiscal policy?

• A)consumption
• B)private investment
• C)net exports
• D)All of the above are crowded out by higher interest rates.

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Definitions:

Nominal Wage

The wage paid to workers stated in current money terms, without adjustment for inflation.

Real Wage

The purchasing power of an individual's income, accounting for inflation and reflecting how many goods and services can be bought.

Nominal Wages

Wages paid to employees not adjusted for changes in price level, representing the monetary value of earnings.

Real Wages

Wages adjusted for inflation, reflecting the purchasing power of income and the real value of earnings over time.