In the Extreme Case of a Complete Crowding-Out Effect

question 147

Multiple Choice

In the extreme case of a complete crowding-out effect

• A) an increase in interest rates will stimulate investment spending.
• B) an increase in tax rates will stimulate work effort.
• C) an increase in government spending will not increase aggregate demand.
• D) an increase in government spending will stimulate investment spending.

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Definitions:

Vicarious Reinforcement

Learning that occurs by observing the rewards or punishments that another person receives, influencing the observer's future behavior.

Conditioned Reinforcers

Stimuli that acquire their reinforcing power through association with primary reinforcers; also known as secondary reinforcers.

Social-learning Approach

A theory stating that behaviors are learned through observing and imitating others, as well as through the rewards or punishments associated with these behaviors.

New Style

A fresh or novel approach, technique, or fashion in a certain field or activity.