Advocates of the Crowding-Out Effect Maintain That the Large Budget

question 58

Multiple Choice

Advocates of the crowding-out effect maintain that the large budget deficits during the recession of 2008-2009

• A)stimulated output and employment, leading to a quicker recovery.
• B)will lead to a slower recovery than would have been the case if government borrowing had been more restrained.
• C)led to lower interest rates, stimulating private investment and consumption.
• D)will lead to lower future taxes and more private spending as the economy recovers.

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Definitions:

Hans Selye

A pioneering Hungarian-Canadian endocrinologist known for his research on the stress response and the concept of the General Adaptation Syndrome.

Stress Physiology

The biological processes and changes in the body that occur in response to stress, involving the nervous and endocrine systems.

Biofeedback

A technique that teaches individuals to control physiological functions by providing real-time feedback on biological data.