Which of the Following Sequences Best Represents the Crowding-Out Effect $\uparrow \Rightarrow$

question 233

Multiple Choice

Which of the following sequences best represents the crowding-out effect?

• A)government purchases \(\uparrow \Rightarrow\) GDP\(\uparrow \Rightarrow\) supply of money \(\darr\Rightarrow\) equilibrium interest rate \(\uparrow \Rightarrow\) quantity of goods and services demanded \(\darr\)
• B)government purchases \(\darr\Rightarrow\) GDP \(\darr\Rightarrow\) demand for money \(\darr\Rightarrow\) equilibrium interest rate \(\darr\Rightarrow\) quantity of goods and services demanded \(\darr\)
• C)government purchases \(\uparrow \Rightarrow\) GDP \(\uparrow \Rightarrow\) demand for money \(\uparrow \Rightarrow\) equilibrium interest rate \(\uparrow \Rightarrow\) quantity of goods and services demanded \(\darr\)
• D)taxes \(\uparrow \Rightarrow\)GDP \(\darr\Rightarrow\) demand for money \(\darr\Rightarrow\) equilibrium interest rate \(\uparrow \Rightarrow\) quantity of goods and services demanded \(\darr\)

---

Definitions:

Securities Commission

A Securities Commission is a regulatory body charged with enforcing laws concerning securities and protecting investors by ensuring the stock market operates fairly and transparently.

Online Bankers

Individuals or entities that perform banking activities through internet platforms, including transactions, loans, and account management.

Sports Fans

Individuals enthusiastically devoted to following and supporting athletic games and teams.

College Students

Individuals who are enrolled in an institution of higher learning, working towards earning a degree or certificate.