30 Apr Question: What is crowding out? O a reduction in consumption and investment spending that results from gove…
What is crowding out? O a reduction in consumption and investment spending that results from government borrowing O a reduction in consumption and investment spending that results from increased international trade O a reduction in government borrowing resulting from increases in consumption and investment spending O a reduction in investment, but not consumption, that results from government borrowing O a reduction in consumption, but not investment, that results from government borrowing are a mechanism by which crowding out occurs. OIncreases in interest rates O Decreases in interest rates
Suppose that the government changes the tax code to allow additional amounts of money to be placed in 401k retirement accounts, increasing the extent to which people can delay their tax obligation (effectively, this is a tax cut on retirement savings). Show the effect by shifting the appropriate curve in the market for savings. According to this model, what is the result? Supply O Private investment would increase as the cost of borroWing increased OPrivate investment would decrease as the cost of borrowing decreased O Private investment would increase as the cost of borrowing ddecreased O Private investment would decrease as the cost of borrowing increased Dem Saving and investment
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