Crowding out occurs because the government increases the demand for loanable funds, drives up interest rates, and causes: Select one: a. saving to rise. b. saving to fall. c. consumption and investment to rise. d. consumption and investment to fall.

Crowding out occurs because the government increases the demand for loanable funds, drives up interest rates, and causes Consumption and investment to fall.

Explanation:

When the government increases its spending this leads to an improve in the interest rates, Crowding out means when the improve in the rate of interest leads to lesser investment in an economy. The fall in investment immediately due to increase in rate of interest is called crowding out effect.

So crowding out will result in consumption and investment to fall. When interest rate increases the loans become more expensive. This leads to less borrowing in an economy that simultaneously causes investment to fall. People will have less money to invest.

marginal cost is a microeconomic measure that us to evaluate the extent to which the level of production of a good is sustainable in accounting, that is, to how many quantities the company plans to profit from the production of the good.

the concept of marginal cost is simple, it means the cost of producing one more item. for example, in the case of pies, the marginal cost is the cost of producing one more pie than those that have already been produced.

it is important to understand that productive activity influences marginal cost. the marginal cost of some goods can be very high, while others may be insignificant. for example, the marginal cost of producing an extra plane is very high. already the marginal cost of a water company to provide 1l more water is derisory.

in the case of pies, the cost involves the inputs, the labor and the fixed cost, which involves the fixed space of the bakery. the level of production initially has the marginal cost decreasing because there is space and manpower available. however, to produce more you have to hire more workers and buy more inputs. if physical space is limited, workers will conflict with places, inputs and their productivity will decrease, meaning there is an optimum point of production for each level of space and manpower. from this point on, the productivity of the workers will be getting smaller because of lack of space, so that the marginal cost of producing one more pie will be increasing. so, although you have not posted the chart, but if you have the answer, you can see that my explanation goes according to the marginal cost curve that will increase from the 4th pie, answer (c).