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

question 39

Multiple Choice

What impact does a larger crowding-out effect have on the magnitude of a given fiscal policy's effect on real output in the short run and net exports?

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

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