In the Long Run,the Crowding-Out Effect of an Increase in Government

question 114

Multiple Choice

In the long run,the crowding-out effect of an increase in government purchases is

• A) more complete than in the short run
• B) canceled out by increases in infrastructure spending
• C) less complete than in the short run
• D) canceled out by improved consumer confidence
• E) a multiple of the initial change in spending

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Definitions:

Misbehaves

To act out or behave badly, contrary to established rules or expectations.

Punishment

A consequence administered to reduce the likelihood of a behavior occurring in the future, often involving an unpleasant or negative experience.

Shaping

Shaping is a psychological conditioning technique in which successive approximations toward a desired behavior are reinforced, gradually leading to the adoption of the behavior.

Reinforcing

The process of encouraging or establishing a pattern of behavior by offering rewards or incentives.