At the Local Park There Is a Playground for Children

question 45

Multiple Choice

At the local park there is a playground for children to use. While anyone is allowed to use the playground, it is often very busy, reducing the enjoyment of many of the children who use it. The playground is a

• A)private good.
• B)club good.
• C)common resource.
• D)public good.

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Definitions:

Crowding out

A situation in economics where increased government spending displaces private sector spending, either through higher taxes, higher interest rates, or borrowing.

Government Expenditures

The spending by the government sector on goods and services, including public services and public investment.

Multiplier

An economic factor that quantifies the effect of a change in fiscal or monetary policy on the overall economy, such as how an increase in government spending can lead to a larger increase in national income.

Crowding out

A situation where increased government spending leads to reduced investment in the private sector due to higher interest rates or competition for resources.