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How Much Crowding Out Would Be Expected from an Expansionary

question 15

Essay

How much crowding out would be expected from an expansionary fiscal policy if investment was completely insensitive to the interest rate: that is independent of the interest rate? Explain your answer.


Definitions:

Partnership Capital

The total resources or assets that partners contribute to a partnership for the purpose of starting or expanding the business.

Trade Name

A commercial name used by a company or business for trading purposes, under which it conducts business or offers services.

Sole Proprietor

An individual who owns and operates a business alone, without forming a corporation or partnership.

Fictitious Business Names

Aliases under which individuals or businesses operate that are different from their legal, registered names, often registered with local or state governments.

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