Crowding-Out Occurs When

question 88

Multiple Choice

Crowding-out occurs when

• A) supply-side fiscal policy does not increase total output.
• B) consumption increases when government spending increases.
• C) private spending falls in response to increases in government spending.
• D) time lags crowd out the effects of fiscal policy.
• E) increases in government spending and decreases in taxes are offset by increases in savings.

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Definitions:

Adopted Children

Children who have become part of a family they were not born into, through a legal process.

Cause-and-Effect

The relationship between events where one or more are the result of the others, indicating a direct line of action and response.

Sensation

The process of receiving stimuli from the environment and the initial encoding into the nervous system.

Nervous System

The complex network of neurons and supporting cells that transmit signals between different parts of the body and the brain.