If Counter-Cyclical Fiscal Policy Causes Crowding-Out,which of the Following Statements

question 33

Multiple Choice

If counter-cyclical fiscal policy causes crowding-out,which of the following statements is correct?

• A)Crowding-out increases the effectiveness of fiscal policy by pushing up interest rates and reducing investment spending.
• B)Crowding-out reduces the effectiveness of fiscal policy by pushing up interest rates and reducing investment spending.
• C)Crowding-out reduces the effectiveness of fiscal policy by lowering interest rates and reducing investment spending.
• D)Crowding-out enhances the effectiveness of fiscal policy by lowering interest rates and increasing investment spending.
• E)Crowding-out reduces money demand and thereby reduces the effectiveness of fiscal policy.

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Definitions:

Action Potentials

Rapid and temporary changes in the electrical membrane potential of a cell, allowing for the transmission of signals along neurons.

Spastic Contractions

Spastic contractions refer to involuntary muscle spasms that are continuous and caused by various neurological or muscular disorders.

Neuromuscular Junction

The synapse or connection point between a motor neuron and a skeletal muscle fiber, facilitating muscle contraction.

Synaptic Vesicles

Vesicles located within the presynaptic part of a nerve cell that encase neurotransmitters.