Crowding Out: Crowding out effect is basically when the government does fiscal deficit, it eats up into the savings of the public, and therefore leaves lesser amount of money for the private sector to use for investment. Thus, the private investment gets crowded out of the investment due to fiscal deficit of the government.
Governments often borrow money (by issuing bonds) to fund additional spending. The problem occurs when government debt ‘crowds out’ private companies and individuals from the lending market. Increased government borrowing tends to increase market interest rates. The problem is that the government can always pay the market interest rate, but there comes a point when corporations and individuals can no longer afford to borrow.

Money Multiplier: The expansion of a country’s money supply that results from banks being able to lend. The size of the multiplier effect depends on the percentage of deposits that banks are required to hold as reserves. In other words, it is money used to create more money and is calculated by dividing total bank deposits by the reserve requirement. The multiplier effect depends on the set reserve requirement. So, to calculate the impact of the multiplier effect on the money supply, we start with the amount banks initially take in through deposits and divide this by the reserve ratio. If, for example, the reserve requirement is 20%, for every $100 a customer deposits into a bank, $20 must be kept in reserve. However, the remaining $80 can be loaned out to other bank customers. This $80 is then deposited by these customers into another bank, which in turn must also keep 20%, or $16, in reserve but can lend out the remaining $64. This cycle continues – as more people deposit money and more banks continue lending it – until finally the $100 initially deposited creates a total of $500 ($100 / 0.2) in deposits. This creation of deposits is the multiplier effect. The higher the reserve requirement, the tighter the money supply, which results in a lower multiplier effect for every dollar deposited. The lower the reserve requirement, the larger the money supply, which means more money is being created for every dollar deposited.

Rent seeking occurs when an individual, organization or firm seeks to earn income by capturing economic rent through manipulation or exploitation of the economic or political environment, rather than by earning profits through economic transactions and the production of added wealth. While there may be few people in modern industrialized countries who do not gain something, directly or indirectly, through some form or another of rent seeking, rent seeking in the aggregate can impose substantial losses on society. Rent seeking can be performed by either buying a monopoly or by creating a monopoly.
Hence, the firm’s rent seeking costs are treated as fixed costs, which get added to the total fixed costs and to the average total cost. The ATC curve shifts upward until, at the profit maximisation price, the firm breaks even. This means that a firm which is a rent seeker only makes a normal profit.

Monte Carlo Simulation: A problem solving technique used to approximate the probability of certain outcomes by running multiple trial runs, called simulations, using random variables. Monte Carlo simulation is a computerized mathematical technique that allows people to account for risk in quantitative analysis and decision making. The technique is used by professionals in such widely disparate fields as finance, project management, energy, manufacturing, engineering, research and development, insurance, oil & gas, transportation, and the environment. Monte Carlo simulation furnishes the decision-maker with a range of possible outcomes and the probabilities they will occur for any choice of action.. It shows the extreme possibilities—the outcomes of going for broke and for the most conservative decision—along with all possible consequences for middle-of-the-road decisions.