Crowding out occurs when
A. increased taxes force higher levels of national saving.
B. deficit spending by the government forces private investment spending to contract.
C. local businesses cannot get government contracts because of the higher bids of large corporations.
D. foreign investors are willing to pay higher prices for U.S. bonds than American citizens will pay.
Answer: B
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Which of the following provides the strongest evidence that a firm operating in the highly competitive retail sector is failing to provide goods and services that consumers value highly relative to their cost?
a. The firm is making losses, and its sales are declining. b. The top-level managers of the firm are paid high salaries. c. The wages earned by the employees of the firm are low. d. The firm is a large corporation. e. The firm is highly profitable, and its sales have grown rapidly.
The costs associated with reaching and enforcing agreements are called
A) private property costs. B) common property costs. C) transaction costs. D) public costs.