When Crowding Out Occurs

question 131

Multiple Choice

When crowding out occurs,

• A)private spending replaces public spending
• B)the dollar typically weakens in foreign exchange markets
• C)public spending replaces private spending
• D)it offsets any gains created from the lower interest rates
• E)none of the above

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Definitions:

Direct Labor

The wages and other costs for labor directly involved in the production of goods or services.

Annual Overhead

The total recurring business expenses not directly tied to the production of goods or services, calculated on a yearly basis.

Manufacturing Overhead-Applied

The allocation of estimated manufacturing overhead costs to individual products or job orders based on a predetermined rate.