Crowding Out Will Be Greater

question 54

Multiple Choice

Crowding out will be greater

• A)the less sensitive consumption spending is to changes in the interest rate.
• B)the further equilibrium GDP is below potential GDP.
• C)the more sensitive investment spending is to changes in the interest rate.
• D)if the economy is in recession, rather than at full employment.
• E)the more sensitive consumers are to changes in the tax rate.

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Definitions:

Official Income Data

Income statistics and figures released by governmental or authoritative bodies, reflecting incomes across various demographics.

Purchasing Power

The value of currency expressed in terms of the amount of goods or services that one unit of money can buy.

Noncash Transfers

Benefits provided by the government or organizations in forms other than direct cash, such as food stamps or housing subsidies.

Prejudiced Employer

An employer that treats potential or current workers unfairly based on personal prejudices that have nothing to do with how well they perform their jobs.