Which of the Following Is Not an Example of Crowding

question 11

Multiple Choice

Which of the following is not an example of crowding out?

• A) Government purchases rise,the budget deficit rises,the federal government's demand for loanable funds rises,the interest rate rises,and investment falls.
• B) Government spends more on X,prompting individuals to spend less on X.
• C) Taxes decline,the budget deficit rises,the federal government's demand for loanable funds rises,the interest rate rises,the demand rises for U.S.dollars,the dollar appreciates,and net exports decline.
• D) Business firms spend more on X,prompting households to spend less on Y.
• E) none of the above

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Definitions:

Export Fees

Charges associated with sending goods or services to another country, which can include customs duties, taxes, and transportation costs.

Production Capacity

The maximum output a company can produce in a given period under normal circumstances.

Variable Manufacturing Costs

Costs that vary directly with the level of production output, including raw materials, direct labor, and variable overhead expenses.

Operating Income

Earnings before interest and taxes (EBIT), an indicator of a company’s profitability from its core business operations.