Ca on 11 of 22 Map de Sapling Learning Which of the followin

Ca on 11 of 22 Map de Sapling Learning Which of the following is an example of the crowding-out effect on investment as it pertains to macroecanomics? wnich of the folowing is an example of the crowding-out efect on investment as it perains to m Jack wants to borrow money to create a cowboy which is now too high for Jack to afford to borrow. Candex, an eyeglass frame company, decides to cut the price on all of its frames to $10, house for kids O called \"Wild Wild West\". The government is running a deficit, pushing up the interest rate which successfully drives out all other firms from the market. The govemment deficit is at an all-time high in the United States. As such, people begin to save more money in fear that taxes will increase in the future. The govemment of Walla Walla spent $4.3 billion dollars and collected $2.2 billion dollars O in tax revenue.

Solution

1) A

Jack is not able to borrow due to very high interest rates is the best example for crowding out.

Crowding out is nothing but reduction in investment due to increase in interest rates. This will lead to reduction in overall investment