The Crowding-Out Effect of Expansionary fiScal Policy Suggests That

question 70

Multiple Choice

The crowding-out effect of expansionary fiscal policy suggests that

• A) tax increases are paid primarily out of saving and therefore are not an effective fiscal device.
• B) increases in government spending financed through borrowing will increase the interest rate and thereby reduce investment.
• C) it is very difficult to have excessive aggregate spending in the U.S. economy.
• D) consumer and investment spending always vary inversely.

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Definitions:

Laissez-faire Leadership

A leadership style characterized by minimal direct supervision, with leaders providing teams with a high degree of autonomy and trust to make decisions.

Transformational Leadership

A leadership style that inspires and motivates followers to achieve extraordinary outcomes by transforming their attitudes and behaviors.

Transactional Leadership

Transactional Leadership is a style focused on the exchange between leader and followers, where followers are rewarded for specific achievements or penalized for failures.

High LPC

stands for High Least Preferred Coworker score, indicating a leadership style that is more relationship-oriented and concerned with maintaining good interpersonal relations.