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:

IASB

The International Accounting Standards Board, an independent group responsible for setting and enforcing global accounting standards known as International Financial Reporting Standards (IFRS).

Accepted Accounting Principles

Standards and conventions in accounting that provide guidelines for financial reporting, often referred to as Generally Accepted Accounting Principles (GAAP).

Inflationary Economies

Economies experiencing a sustained increase in the general price level of goods and services over a period of time.

Political Colonialism

The practice or policy of controlling a country or area by establishing colonies there, often involving economic exploitation and cultural domination.