How Do the Multiplier Effect and the Crowding-Out Effect Change

question 123

Multiple Choice

How do the multiplier effect and the crowding-out effect change the consequences of an increase in government spending?

• A) They both amplify the consequences.
• B) They both diminish the consequences.
• C) The multiplier effect diminishes the consequences, while the crowding-out effect amplifies the consequences.
• D) The multiplier effect amplifies the consequences, while the crowding-out effect diminishes the consequences.

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Definitions:

Sample Size

The number of observations or data points collected or used in a sample for analysis.

Lower Tail

The portion of a distribution of data or probability to the left of a specified value.

P-value

A measure in statistical hypothesis testing that helps determine the significance of the results.