Which Statement Best Explains the Crowding-Out Effect

question 87

Multiple Choice

Which statement best explains the crowding-out effect?

• A) An increase in government expenditures decreases the interest rate and so increases investment spending.
• B) An increase in government expenditures increases the interest rate and so reduces investment spending.
• C) A decrease in government expenditures increases the interest rate and so increases investment spending.
• D) A decrease in government expenditures decreases the interest rate and so reduces investment spending.

---

Definitions:

CVD

Stands for Cardiovascular Disease, encompassing a range of heart and blood vessel conditions, including coronary artery disease and stroke.

Inflammation

The body's protective response to injury or damage, characterized by redness, swelling, heat, and sometimes pain and loss of function.

Cardiovascular Disease

A class of diseases that involve the heart or blood vessels, such as arteriosclerosis, heart attacks, and stroke.

Single Women

Women who are not married or in a romantic relationship.