The Crowding-Out Effect Implies That Restrictive Fiscal Policy Will

question 144

Multiple Choice

The crowding-out effect implies that restrictive fiscal policy will

• A) increase aggregate demand and employment.
• B) lead to a significant increase in the natural rate of unemployment.
• C) be highly effective against inflation.
• D) reduce real interest rates.

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Definitions:

Oppositional Defiant Disorder

A childhood disorder characterized by defiant, disobedient, and hostile behaviors towards authority figures.

Substance Abuse

The excessive use of substances, including alcohol and drugs, that leads to addiction or other harmful effects.

Physically Aggressive

Exhibiting behavior that involves physical force intended to hurt, damage, or kill someone or something.

Serotonin

A neurotransmitter in the brain that plays a key role in stabilizing mood, feelings of well-being, and happiness.