Economists Who Believe in Complete Crowding Out Would Argue That

question 29

Multiple Choice

Economists who believe in complete crowding out would argue that

• A) jobs created or saved because of increased government spending will be matched by an equal number of jobs created by an increase in private sector spending.
• B) jobs created or saved because of increased government spending will be completely offset by jobs destroyed by a decline in private sector spending.
• C) government policies intended to stimulate aggregate demand will be completely ineffective.
• D) government policies intended to stimulate aggregate demand will tend to be effective.
• E) a and c

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Definitions:

Liabilities

Financial obligations or debts that a company owes to others, which must be settled over time through the transfer of economic benefits.

AASB 121

The Australian Accounting Standards Board document that refers to the effects of changes in foreign exchange rates on financial reporting.

Functional Currency

The currency of the primary economic environment in which an entity operates, used in its financial reporting.

Primary Economic Environment

The main economic setting in which a company operates and carries out its operations, often determined by its reporting currency and major market.