If _____, Expansionary Fiscal Policy Is Most Likely to Crowd

question 8

Multiple Choice

If _____, expansionary fiscal policy is most likely to crowd out private spending.

• A) the unemployment rate is 15%
• B) aggregate income is $500 billion above its potential level
• C) aggregate income is $800 billion below its potential level
• D) aggregate output is $300 billion below its potential level

---

Definitions:

Presentment

The act of making a demand for the drawee to pay.

Dishonored

refers to a financial instrument, like a check, being refused by the bank upon presentation for payment due to insufficient funds or other reasons.

Endorses

The act of signing the back of a check or any other document, which signifies agreement, approval, or endorsement of its contents.

Instrument

A writing that serves as evidence of the right to payment of money.