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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