What Impact Does a Smaller Crowding-Out Effect Have on the Magnitude

question 48

Multiple Choice

What impact does a smaller crowding-out effect have on the magnitude of a given fiscal policy's effect on AD and net exports?

• A)It increases the magnitude of a given fiscal policy's effect on AD and decreases the magnitude of its effect on net exports.
• B)It increases the magnitude of a given fiscal policy's effect on AD and increases the magnitude of its effect on net exports.
• C)It decreases the magnitude of a given fiscal policy's effect on AD and decreases the magnitude of its effect on net exports.
• D)It decreases the magnitude of a given fiscal policy's effect on AD and increases the magnitude of its effect on net exports.

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Definitions:

Encoding Specificity Principle

A principle that suggests the recall of information is improved when the contexts present at encoding and retrieval are similar.

Depth-Of-Processing Principle

A theory suggesting the depth (shallow to deep) of mental processing affects memory recall, with deeper processing leading to better recall.

Serial-Order Effect

a phenomenon observed in psychology where the position of an item in a sequence affects the likelihood of its recall.

Depth of Processing

A concept in cognitive psychology that describes how deeply information is thought about or processed, which affects memory retention.