What Type of Government Spending Would Be MOST Effective in Mitigating

question 298

Multiple Choice

What type of government spending would be MOST effective in mitigating the crowding-out effect?

• A) education subsidies
• B) transfer payments
• C) military spending
• D) increased salaries for the presidential staff

---

Definitions:

Labor Income

Earnings derived from work or employment, including wages, salaries, commissions, and any other income earned as compensation for labor services.

Lump Sum Payment

A one-time payment for the total amount due, rather than breaking it down into multiple payments over time.

Leisure

The time individuals spend away from work or productive activities, often used for relaxation or recreational activities.

Wage Rate

The fixed amount of money or compensation paid to an employee by an employer in exchange for work performed.