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Kitty [74]
3 years ago
5

Crowding out refers to the situation in which Group of answer choices borrowing by the federal government raises interest rates

and causes firms to invest less. foreigners sell their bonds and purchase U.S. goods and services. borrowing by the federal government causes state and local governments to lower their taxes. increased federal taxes to balance the budget causes interest rates to increase and consumer credit to decrease.
Business
2 answers:
goldenfox [79]3 years ago
6 0

Answer:

Crowding out refers to the situation in which borrowing by the federal government raises interest rates and causes firms to invest less - option A.

Explanation:

Generally, a condition whereby a persistent government borrowing decreases the likelihood of the government repaying the borrowed loan or credit and consequently raises the interest rate is referred to as Crowding out. This situation would cause a decline in private investment level by the companies or firms.

Therefore, borrowing by the federal government raises interest rates, causing firms to invest less is the correct answer.

vlabodo [156]3 years ago
3 0

Answer:

Borrowing by the federal government raises interest rates and causes firms to invest less

Explanation:

Crowding out is an economic concept whereby increased federal Government spending and deficit financing i.e borrowing by the federal government sucks up the financial resources therefore leading to hike in interest rates to pay up the money borrowed by the government.

This economic concept leads to decrease in firms or individual involvement in financial and business activities due to the hike in interest rates and the resultant inflation that comes with it.

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The fact that Sawyer Components have seen opportunities in China and want to expand there reflects<u> global vision. </u>

<h3>What is global vision?</h3>

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A firm does not expect to pay dividends in the next four years. beginning five years from today, the firm expects to pay a const
abruzzese [7]
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3 years ago
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What should the west be doing to keep healthy economies? what are their options?
Korolek [52]

Answer:

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1 year ago
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Marianna [84]
The answer is PRICE FLOORS.
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Please dont just answer for points
Temka [501]
I think the answer is A, only speaking from practical experience though!
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