3. The "crowding- out effect" refers to the possibility that larger expenditures bythe government simply crowd-out state and local spending *TrueFalseTOSHIBA

Government borrows from the market to fund its increased expenditure, this borrowing leads to an…

Answered: S. The "crowding- out effect" refers to…

S. The "crowding- out effect" refers to the possibility that larger expen Ehe government simply crowd-out state and local spending * True

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section11.B: Algebraic Treatment Of Taxes And Fiscal Policy

Problem 3TY

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Concept explainers

Fiscal Policy and Money Market

Fiscal policy is one of the important tools that is used by the government to control inflation or aggregate demand in the economy. Under this policy, there are two rules which are used by the government, one is the expenditure of the government and the other is the taxation or income of the government which it collects from the public.

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3. The "crowding- out effect" refers to the possibility that larger expenditures by
the government simply crowd-out state and local spending *
True
False
TOSHIBA

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