The Crowding-Out Effect of Expansionary Fiscal Policy Suggests That

question 190

Multiple Choice

The crowding-out effect of expansionary fiscal policy suggests that

• A)government spending increases at the expense of private investment.
• B)imports replace domestic production.
• C)private investment increases at the expense of government spending.
• D)saving increases at the expense of investment.

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Definitions:

Balance Sheet Accounts

Financial accounts that represent the assets, liabilities, and shareholders' equity of a company at a specific point in time, as shown on the balance sheet.

Order

A request by a customer or company to purchase goods or services, often formalized through a purchase order document.

Ledger

A book or collection of accounts in which account transactions are recorded, categorized by account type, and used to prepare financial statements.

Normal Balances

The typical balance sides (debit or credit) for different types of accounts in accounting, determining how increases or decreases are recorded.