The "Crowding-Out Effect" Suggests That

question 86

Multiple Choice

The "crowding-out effect" suggests that

• A)tax increases are paid primarily out of saving and therefore are not an effective fiscal device.
• B)increases in government spending financed through borrowing will increase the interest rate and reduce private investment.
• C)it is very difficult to have excessive aggregate spending in our economy.
• D)consumer and investment spending always vary inversely.

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Definitions:

Serial Search

A search for information in which several stores or slots of information are sequentially examined for match to the target.

Anterograde Amnesia

A condition in which a person is unable to form new memories following the onset of amnesia, although memories from before the onset may remain intact.

Hippocampus

A crucial part of the brain involved in memory formation and spatial navigation.

Receny Effect

The tendency to remember and give greater importance to the most recently presented information over older information.