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:

Affluenza

A social condition arising from the desire to be more wealthy or successful, often leading to psychological distress or dissatisfaction.

Conspicuous Consumption

The spending of money on and the acquisition of luxury goods and services to publicly display economic power and social status.

Conspicuous Waste

The act of buying products not for their intrinsic value or utility but to flaunt wealth and status by their mere possession or waste.

Consumer Behaviour

The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas.