Assume an economy is in recession and the government is considering using fiscal stimulus measures to boost spending, production and employment. c) Explain how the 'crowding out' problem associated with increased government spending can be avoided. In your answer identify any additional policy that is needed.
Assume an economy is in recession and the government is considering using fiscal stimulus measures to boost spending, production and employment. c) Explain how the 'crowding out' problem associated with increased government spending can be avoided. In your answer identify any additional policy that is needed.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Assume an economy is in recession and the government is considering using fiscal stimulus measures to boost spending, production and employment.
c) Explain how the 'crowding out' problem associated with increased government spending can be avoided. In your answer identify any additional policy that is needed.
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