Which Policy to Finance the Public Debt Might Crowd-Out Private

question 13

Multiple Choice

Which policy to finance the public debt might crowd-out private spending?

• A)borrowing money from the public in the money market
• B)decreasing government spending
• C)creating new money
• D)decreasing taxes

---

Definitions:

Regulatory Focus Theory

The theory proposing that individuals regulate their behavior via two distinct systems: promotion focus (pursuit of goals and aspirations) and prevention focus (avoidance of negative outcomes).

Elaboration Likelihood Model

A theory in social psychology that explains the different ways people process persuasive messages, either through careful thought and evaluation or more automatic responses.

Promotion Focus

A general tendency to think and act in ways oriented toward the approach of positive outcomes.

Maintenance Motivation

The drive to continue engaging in behaviors that uphold established habits, goals, or standards over time.