How do rising interest rates cause crowding out?
What will be an ideal response?
Crowding out occurs when borrowing and spending by the government reduce private sector borrowing and spending. If the government borrows money to spend, it increases the demand for borrowed dollars. This causes the price of borrowing, or the interest rate, to rise. At higher interest rates, businesses and households are less interested in borrowing money, so private sector spending decreases.
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An airline's flight is about to take off. It has a few empty seats left aboard. If it lowers its prices, it can fill the remaining seats and fly at full capacity. What should be done?
a. Sell the additional standby seats at a discount since the marginal costs of the additional passenger are almost zero and fly at full capacity b. Sell the additional standby seats without a discount c. Don't offer the additional seats for any price d. none of the above
The Vendor List contains information about:
a. Addresses, contacts and phone numbers of customers b. Addresses, contacts and phone numbers for suppliers c. Quantities and prices of items on hand d. All of these
Points on the utility possibility frontier are
A. inefficient. B. points of incomplete preferences. C. not producible. D. Pareto.
According to the official U.S. threshold, 35 percent of Americans live in poverty.
Answer the following statement true (T) or false (F)