The Crowding-Out Effect Suggests That

question 52

Multiple Choice

The crowding-out effect suggests that:

• A)increases in consumption are always at the expense of saving.
• B)increases in government spending will close a recessionary gap.
• C)increases in government spending may raise the interest rate and thereby reduce investment.
• D)high taxes reduce both consumption and saving.

---

Definitions:

Civil Liberties

Fundamental rights and freedoms that are protected from infringement by the government, such as freedom of speech, privacy, and equal rights.

Espionage Act

A United States federal law passed in 1917 that was aimed at preventing interference with military operations, supporting enemy nations, and promoting insubordination in the military.

First Amendment

An amendment to the United States Constitution that guarantees freedoms concerning religion, expression, assembly, and the right to petition.

American Civil Liberties Union

Organization founded during World War Ⅰ to protest the suppression of freedom of expression in wartime; played a major role in court cases that achieved judicial recognition of Americans’ civil liberties.