Because of Crowding Out

question 262

Multiple Choice

Because of crowding out

• A) expansionary fiscal policy during a recession must involve a tax increase.
• B) expansionary fiscal policy during a recession is reinforced by private investment spending.
• C) the effect of expansionary fiscal policy is partially offset by the decline in investment spending caused by higher interest rates.
• D) expansionary fiscal policy is completely achieved even with a decline in investment spending.

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