The Crowding-Out Effect Indicates That Increased Government Borrowing Will Lead

question 2

Multiple Choice

The crowding-out effect indicates that increased government borrowing will lead to:

• A)​an increase in consumption by households and an increase in investment spending by firms.
• B)​an increase in consumption by households and a decrease in investment spending by firms.
• C)​a decrease in consumption by households and an increase in investment spending by firms.
• D)​a decrease in consumption by households and a decrease in investment spending by firms.

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Definitions:

Positively

An attitude or manner that is optimistic and constructive, often contributing to favorable outcomes.

Adjustment Refusal

A response denying a request for modification, compensation, or correction in a business setting.

Common Agreement

A common agreement refers to a mutual understanding or consensus reached by two or more parties.

Free Use

The allowance to use content, material, or facilities without restrictions or payment, often within certain legal or ethical limits.