Which of the Following Is an Example of Crowding Out

question 125

Multiple Choice

Which of the following is an example of crowding out?

• A) A decrease in the rate of growth of the money supply which causes a decrease in Real GDP.
• B) A budget deficit causes an increase in interest rates,which causes a decrease in investment spending.
• C) An increase in tariffs which causes a decrease in imports.
• D) A decrease in government housing subsidies which causes an increase in private spending on housing.

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Definitions:

Generates Revenues

The process through which a business earns income from its normal operations, typically through the sale of goods and services.

Profit Center

A unit or department that incurs costs and generates revenues.

Revenue Center

A division or unit within a business responsible for generating significant income.

Departmental Reports

Internal documents that break down business performance by departments, aiding in analyzing specific areas of a company.