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:

Stratification System

A social structure that divides society into different layers based on socio-economic status, race, ethnicity, or gender.

Ascribed Status

A social position assigned at birth or involuntarily later in life, based on factors like race, family background, and so on, over which the individual has no control.

Class System

The organized pattern of social class in society.

Achieved Status

A social position a person gains through their own efforts or accomplishments, as opposed to ascribed status, which is inherited or assigned at birth.