If Crowding Out Exists, the Expansionary Effect of Government Spending

question 52

Multiple Choice

If crowding out exists, the expansionary effect of government spending will be:

• A)smaller than intended.
• B)negative.
• C)infinite.
• D)larger than intended.
• E)zero.

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Definitions:

Discontinued Operations

Components of a business that have been sold or abandoned and are reported separately in the financial statements to give a clearer picture of ongoing operations.

Component

A distinct and often smaller part of a larger system, that contributes to the overall functionality or structure of that system.

Payout Ratio

A financial metric indicating the percentage of earnings a company pays to its shareholders in the form of dividends.

Earnings Distributed

The portion of a company's profit paid out to shareholders, typically in the form of dividends.