A Practical Implication of the Crowding-Out Effect Is That It

question 12

Multiple Choice

A practical implication of the crowding-out effect is that it

• A) makes contractionary fiscal policy more effective than expansionary fiscal policy.
• B) argues for a larger role of the government in fighting recessions.
• C) makes expansionary fiscal policy less effective.
• D) increases the size of the spending multiplier.

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Definitions:

Product Structure

The organization of a company’s product lines or portfolio, detailing how products are interrelated or grouped.

Functional Structure

an organizational configuration that groups together employees based on their specific functions or roles within the company.

Divisional Structural Form

An organizational structure where operations are divided into autonomous divisions based on product, service, market, or geographic location.

Matrix Structure

An organizational structure that combines two or more types of departmentalization, often product and functional, giving rise to a complex grid of interdepartmental relationships.