A Larger Crowding-Out Effect

question 104

Multiple Choice

A larger crowding-out effect:

• A)increases the magnitude of a given fiscal policy's effect on AD and increases the magnitude of its effects on investment.
• B)increases the magnitude of a given fiscal policy's effect on AD and decreases the magnitude of its effects on investment.
• C)decreases the magnitude of a given fiscal policy's effect on AD and increases the magnitude of its effects on investment.
• D)decreases the magnitude of a given fiscal policy's effect on AD and decreases the magnitude of its effects on investment.

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Definitions:

Chronic Conditions

Long-lasting medical conditions that can be controlled but not cured.

Hypertension

Chronically high blood pressure.

Arthritis

A group of painful and degenerative conditions marked by inflammation in the joints, leading to stiffness and pain.

Depression

A common and serious mood disorder characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.