Crowding Out Refers to a Decline in ________ as a Result

question 298

Multiple Choice

Crowding out refers to a decline in ________ as a result of an increase in ________.

• A)tax revenues; unemployment
• B)government purchases; tax rates
• C)government purchases; private expenditures
• D)private expenditures; government purchases
• E)exports; tariffs

---

Definitions:

Inflation Level

Inflation level measures the rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Base Year

A specific year chosen as a point of reference or benchmark for financial or economic data comparison over time.

Laspeyres Index

A measure of price inflation that calculates the relative price change of a fixed basket of goods and services at current prices compared to the prices of the same basket in a base period.

Price Levels

The overall average price of all goods and services made in the economy.