The "Crowding-Out Effect" Suggests That

question 38

Multiple Choice

The "crowding-out effect" suggests that:

• A)tax increases are paid primarily out of saving and therefore are not an effective fiscal device.
• B)increases in government spending financed through borrowing will increase the interest rate and thereby reduce investment.
• C)it is very difficult to have excessive aggregate spending in our economy.
• D)consumer and investment spending always vary inversely.

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Definitions:

Schizophrenia

A long-term mental disorder involving a breakdown in the relation between thought, emotion, and behavior, leading to faulty perception, inappropriate actions and feelings, withdrawal from reality and personal relationships into fantasy and delusion, and a sense of mental fragmentation.

Depression

A common and serious medical illness that negatively affects how one feels, thinks, and acts, characterized by feelings of sadness and/or a loss of interest in activities once enjoyed.

Schizophrenia

A mental disorder characterized by abnormal behavior, strange speech, and a decreased ability to understand reality.

Psychiatric Hospital

A psychiatric hospital is a specialized medical facility dedicated to the treatment, care, and support of individuals with mental health disorders.