Home › BC Graduation Assessments › English › Reading Comprehension › Read these lines: "When government takes more mo…
Read these lines: "When government takes more money from business and consumers, a phenomenon known as crowding out occurs. The government spends more on public libraries, and individuals buy fewer books at bookstores. The government spends more on public education, and individuals spend less on private education." Which new situation best matches the pattern described in the quoted lines?
AA free city gym opens, and a private gym nearby loses its members
BA city cuts bus fares, and more riders choose to take public buses
CTwo private bookstores merge so they can offer customers lower prices
DA government lowers taxes, and families spend more at private shops
Answer & Solution
Correct answer: A. A free city gym opens, and a private gym nearby loses its members
1. In each quoted example, public spending on a service rises and private spending on the matching service falls.
2. The libraries and bookstores pair shows the shape: a public offering replaces private purchases of the same kind of thing.
3. A free city gym pulling members away from a private gym repeats that exact shape, public provision displacing private spending.
4. Cheaper bus fares attracting riders describes demand for one public service, with no private provider losing out in the comparison.
5. Two private bookstores merging involves no public spending at all, so no crowding can occur.
6. Lower taxes with rising private spending runs the pattern in reverse, which is the opposite of crowding out.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 1 "Understanding Economic Systems and Business", section 1.5 Achieving Macroeconomic Goals_
Related questions
Read these lines: "In general, the longer a customer stays with a company, the more that cRead these lines: "In a perfectly competitive market, firms sell their products at prices Read these lines about a market for snowboard jackets: "The equilibrium price is $80; the Read these lines about one tool a central bank can use: "An expansionary policy stimulatesRead these lines: "A decline in GDP that lasts for two consecutive quarters (each a three-Read these lines: "If prices go up but income doesn't rise or rises at a slower rate, a giRead these lines: "Full employment doesn't actually mean 100 percent employment. Some peopRead these lines: "The more than 75 million members of the millennial generation were born