Below the Full-Employment Level of Output, Expansionary Fiscal Policy Causes

question 24

Multiple Choice

Below the full-employment level of output, expansionary fiscal policy causes private investment to rise, thus increasing output and creating new investment opportunities. This Liberal concept is known as the

• A) crowding-in effect.
• B) crowding-out effect.
• C) trickle-down effect.
• D) multiplier effect.

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Definitions:

Alternatives

Different options or choices available in any given situation, allowing for flexibility in decision-making processes.

Activities

Engagements or tasks that individuals or groups undertake, often with a specific purpose or objective in mind.

Attitudes

Mental and emotional entities which predispose an individual's response to various situations, objects, or people.

Actual Results

The concrete outcomes or outputs that are achieved at the end of a project or period, often compared against planned objectives or goals.