Which of the Following Is an Example of Crowding Out

question 54

Multiple Choice

Which of the following is an example of crowding out?

• A)An increase in government spending increases interest rates, causing investment to fall.
• B)A decrease in private savings increases interest rates, causing investment to fall.
• C)A decrease in the money supply increases interest rates, causing investment to fall.
• D)An increase in taxes increases interest rates, causing investment to fall.

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Definitions:

Managerial Accounting

The practice of identifying, measuring, analyzing, interpreting, and communicating financial information to managers for the purpose of achieving organizational goals.

Decision Makers

Individuals or groups responsible for making choices or decisions within an organization, typically affecting its strategy or operations.

Plant Manager's Salary

A fixed cost representing the compensation paid to the individual responsible for overseeing the operations of a manufacturing facility.

Indirect Cost

Expenses not directly tied to a specific product or service, often including administrative and facility costs.