Which Piece of Evidence Is Consistent with Zero Crowding Out

question 41

Multiple Choice

Which piece of evidence is consistent with zero crowding out?

• A) Government purchases rise and Real GDP does not change.
• B) Government purchases rise and investment spending declines.
• C) Government purchases rise and net exports decline.
• D) Government purchases rise and consumption declines.
• E) none of the above

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Definitions:

Alternative Action

Potential different courses of action considered in a decision-making process.

Processed Further

A term used in cost accounting to describe materials or products that are subjected to additional operations or stages of processing beyond the initial production stage.

Relevant Costs

Expenses directly tied to a specific business decision, which should be considered when making that decision.

Incremental Revenues

Additional income that is generated by increasing sales activities or by introducing new products or services.