In the Extreme Case of a Complete Crowding-Out Effect

question 147

Multiple Choice

In the extreme case of a complete crowding-out effect

• A) an increase in interest rates will stimulate investment spending.
• B) an increase in tax rates will stimulate work effort.
• C) an increase in government spending will not increase aggregate demand.
• D) an increase in government spending will stimulate investment spending.

---

Definitions:

Pre-Columbian Era

The period in the Americas before the arrival of Christopher Columbus in 1492, characterized by various indigenous civilizations.

Tribal People

Indigenous communities with distinct cultures, traditions, languages, and connection to ancestral lands, often living in close harmony with nature.

Europeans

Refers to people from the continent of Europe.

Soil Fertility

The ability of soil to provide essential nutrients to plants, crucial for agriculture and natural ecosystems.