“Crowding out” refers to the situation in whicha. borrowing by the federal government raisesinterest rates and causes firms to invest less.b. foreigners sell their bonds and purchase U.S.goods and services.c. borrowing by the federal government causesstate and local governments to lower theirtaxes.d. increased federal taxes to balance the budgetcause interest rates to increase and consumercredit to decrease.

“Crowding out” refers to the situation in whicha. borrowing by the federal government raisesinterest rates and causes firms to invest less.b. foreigners sell their bonds and purchase U.S.goods and services.c. borrowing by the federal government causesstate and local governments to lower theirtaxes.d. increased federal taxes to balance the budgetcause interest rates to increase and consumercredit to decrease.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter30: Government Budgets And Fiscal Policy

Section: Chapter Questions

Problem 38CTQ: Why is spending by the U.S. government on scientific research at NASA fiscal policy while spending...

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