Lower personal income taxes

Refer to the table above. If there is no statistical discrepancy, the official settlement account balance equals

A) +$200 billion. B) -$20 billion. C) zero D) +$220 billion. E) +$20 billion.

Which of the following correctly explains the crowding-out effect?

a. An increase in government expenditures decreases the interest rate and so increases investment spending. b. An increase in government expenditures increases the interest rate and so reduces investment spending. c. A decrease in government expenditures increases the interest rate and so increases investment spending. d. A decrease in government expenditures decreases the interest rate and so reduces investment spending.