Crowding Out Suggests That

question 152

Multiple Choice

Crowding out suggests that

• A) high taxes reduce both consumption and saving.
• B) increases in consumption are always at the expense of saving.
• C) increases in government spending may raise the interest rate,thereby reducing investment.
• D) increases in government spending will close a recessionary gap.

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Definitions:

Projection

A defense mechanism where one attributes their own unacceptable thoughts, feelings, or motives to another person.

Illegal Drugs

Substances whose production, sale, or use is prohibited by law due to their potential for abuse and harm.

Defense Mechanism

Strategies used unconsciously by individuals to protect themselves from anxiety and internal conflicts by distorting reality in some way.

Projection

A defense mechanism where an individual unconsciously attributes their own unacceptable thoughts, feelings, or motives to another person.