Both the Crowding-Out Effect and New Classical Model Indicate That

question 28

Multiple Choice

Both the crowding-out effect and new classical model indicate that

• A) expansionary fiscal policy is a highly effective weapon with which to fight an economic downturn.
• B) restrictive fiscal policy is a highly effective weapon with which to control inflation caused by excess demand.
• C) there are side effects of budget deficits that will substantially, if not entirely, offset their expansionary impact on aggregate demand.
• D) fiscal policy can be used effectively to restrain inflation but it is largely ineffective as a weapon against recession.

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Definitions:

Inguinal Region

The area of the lower abdomen, just above the groin, where the thigh meets the trunk of the body; it's a common location for hernias.

Groin

The area between the abdomen and the thigh on both sides of the pubic bone.

Posterior

Referring to the back or rear part of the body or a structure, opposite of anterior.

Back of Body

Refers to the posterior aspect of the body which includes structures and parts on the outward-facing side when in a standard anatomical position.