Crowding-Out Occurs When

question 88

Multiple Choice

Crowding-out occurs when

• A) supply-side fiscal policy does not increase total output.
• B) consumption increases when government spending increases.
• C) private spending falls in response to increases in government spending.
• D) time lags crowd out the effects of fiscal policy.
• E) increases in government spending and decreases in taxes are offset by increases in savings.

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Definitions:

Social Optimum

The most efficient allocation of resources in a society, achieving the best outcomes for social welfare.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they can be used by anyone without preventing others from using them as well.

Voluntary Contributions

Donations or services provided by individuals or organizations willingly without any legal or social obligation.

Public Radio

Radio stations that are funded by public sources, such as government grants and listener donations, rather than commercial advertising.