Crowding Out Is MOST Likely When Expansionary Fiscal Policy Is

question 235

Multiple Choice

Crowding out is MOST likely when expansionary fiscal policy is accompanied by:

• A) expansionary monetary policy.
• B) open-market purchases.
• C) slow growth of the money supply.
• D) an investment tax credit.

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Definitions:

Developing Country

A nation with a lower living standard, underdeveloped industrial base, and low Human Development Index relative to other countries.

Capital Imports

The purchase and importation of foreign capital goods and services, reflecting a country's investment in assets that promote economic growth.

Foreign Aid

Financial or non-financial assistance given from one country to another, often to support development or alleviate poverty.

Purchasing Power

The real value of money in terms of the quantity of goods or services that one unit of money can buy.