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

question 130

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 investment?

• 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 effects on investment.
• 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 effects on investment.
• 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 effects on investment.
• 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 effects on investment.

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Definitions:

Actual Authority

The power that an agent or representative is formally granted by a principal or entity to conduct business on their behalf.

Dissolved

Refers to the process of a substance becoming incorporated into a liquid, resulting in a solution.

Notice

Officially informing someone of a fact or situation, often required by law or agreement for certain actions.

Statute of Frauds

A legal concept that requires certain types of contracts to be in writing and signed by the party to be charged, to prevent fraud and perjuries.