The Crowding-Out Effect Can Drive Up Interest Rates, Which _____

question 258

Multiple Choice

The crowding-out effect can drive up interest rates, which _____ consumer spending on durable goods and _____ business investment.

• A) reduces; increases
• B) reduces; reduces
• C) increases; reduces
• D) increases; increases

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Definitions:

Capital Lease

A lease agreement that has the characteristics of a purchase agreement, where the lessee assumes some risks and benefits of ownership.

Direct Lease

A rental agreement directly between the landlord and tenant, excluding any subleasing arrangements.

Tax Benefits

Financial advantages granted by governmental policies to reduce a taxpayer's burden, often to encourage certain business activities or investments.