The Crowding-Out Effect Implies That a

question 56

Multiple Choice

The crowding-out effect implies that a

• A) budget surplus will be highly effective against inflation.
• B) budget deficit is likely to stimulate aggregate demand and cause inflation.
• C) budget deficit will increase real interest rates and, thereby, retard private spending.
• D) budget surplus will retard aggregate demand and throw the economy into a downward spiral.

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Definitions:

SRS

Simple Random Sampling, a method of sampling where every individual has an equal chance of being selected from a population.

T Procedure

A statistical method used to infer the unknown mean of a population based on a sample mean, especially when the sample size is small.

Non-Normality

A characteristic of a dataset that deviates from the bell-shaped curve associated with a normal distribution, potentially affecting statistical tests.

Skewness

Skewness is a measure of the asymmetry of the probability distribution of a real-valued random variable about its mean, indicating how much the distribution leans towards the left or right.