Which of the Following Is an Example of Crowding-Out

question 88

Multiple Choice

Which of the following is an example of crowding-out?

• A) The government invests in education, shifting the long-run aggregate supply curve to the right.
• B) The government lowers taxes, but spending does not increase.
• C) The government buys elementary students new school uniforms, which decreases the amount of private spending on school uniforms.
• D) The government conducts countercyclical policy at the wrong time.
• E) The government spends more than it collects in taxes.

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