The crowding-out effect refers to
A. an increase in the consumption of imported goods at the expense of domestic goods.
B. a decrease in consumer spending caused by a decrease in consumer confidence.
C. an increase in the consumption of domestic goods at the expense of imported goods.
D. a decrease in consumption and investment caused by an increase in government borrowing.
Answer: D
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When U.S. official reserves ________, the official settlements account balance becomes negative and when U.S. official reserves ________, the official settlements account balance becomes positive
A) increase; decrease B) decrease; increase C) increase; increase D) decrease; decrease E) More information is needed about the balances on the current account and the capital account in order to answer this question.
Christina Romer's estimates of the business cycles prior to World War II showed that the business cycle
A) had greater fluctuations before World War II than previous estimates had shown. B) had smaller fluctuations before World War II than previously estimated. C) had smaller fluctuations before World War II than after World War II. D) had larger fluctuations after World War II than had been previously measured.