Assume That If There Were No Crowding Out, an Increase

question 104

Multiple Choice

Assume that if there were no crowding out, an increase in government spending would increase GDP by $100 billion. On the other hand, if there had been full crowding out, then GDP would have

• A) increased by more than $100 billion.
• B) increased by less than $100 billion.
• C) increased by $100 billion.
• D) not increased.

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Definitions:

Self-interest

The motivation based on one's own benefit or advantage, often considered as the primary motivating factor behind human actions.

Productivity

The measure of efficiency in which goods and services are produced, often assessed through output per unit of input (like labor, time, or cost).

Unconscious Mind

The part of the mind that is not in current awareness but influences thoughts, feelings, actions, and behaviors without one's conscious realization.

Psychoanalysis

Sigmund Freud’s method for delving into the unconscious mind to better understand a person’s motives and needs.