Which of the Following Is an Example of Crowding-Out

question 162

Multiple Choice

Which of the following is an example of crowding-out?

• A) The government invests in education,shifting the long-run aggregate supply curve to the right.
• B) The government lowers taxes,but spending does not increase.
• C) The government increases spending but does not increase taxes,and the size of the deficit increases.
• D) The government adopts a balanced budget amendment.
• E) The government pays $2 million to workers who have lost their jobs in the form of unemployment compensation.