
Crowding Out and Economic Growth
Interactive Video
•
Business, Social Studies, Economics
•
9th - 12th Grade
•
Hard

Patricia Brown
FREE Resource
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10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary focus of the concept of crowding out in macroeconomics?
The rise in tax revenue
The decrease in public sector demand
The increase in government spending
The reduction in private sector investment due to government borrowing
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the government's intention behind increasing deficit spending?
To close a recessionary gap
To reduce inflation
To increase tax revenue
To decrease public debt
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How does government deficit spending affect the loanable funds market?
It decreases the demand for loans
It increases the demand for loans
It stabilizes the interest rates
It reduces the supply of loans
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What happens to the real interest rate when the demand for loans increases due to government borrowing?
It fluctuates randomly
It increases
It remains unchanged
It decreases
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why does private investment decrease when real interest rates rise?
Because private investors prefer higher interest rates
Because higher interest rates discourage borrowing
Because government spending increases
Because tax rates decrease
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which sector's demand increases due to government borrowing?
Foreign sector
Private sector
Agricultural sector
Public sector
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the long-term impact of crowding out on economic growth?
Increased economic growth
No impact on economic growth
Reduced economic growth
Immediate economic growth
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