When Crowding Out Occurs

question 131

Multiple Choice

When crowding out occurs,

• A)private spending replaces public spending
• B)the dollar typically weakens in foreign exchange markets
• C)public spending replaces private spending
• D)it offsets any gains created from the lower interest rates
• E)none of the above

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Definitions:

Scatterplot

A type of graph used in statistics to visually display and compare two variables for a set of data.

Variables Correlated

When variables are correlated, it means there is a statistical relationship showing that changes in one variable are associated with changes in another.

Negative Correlation

A relationship between two variables in which one variable increases as the other decreases, indicating an inverse relationship.

Perfect Correlation

A relationship between two variables where one variable can be perfectly predicted from the other, represented by a correlation coefficient of -1 or 1.