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What Impact Does a Larger Crowding-Out Effect Have on the Magnitude

Question 103

Multiple Choice

What impact does a larger crowding-out effect have on the magnitude of a given fiscal policy's effect on AD and investment?


A) It decreases the magnitude of a given fiscal policy's effect on AD and increases the magnitude of its effect on investment.
B) It decreases the magnitude of a given fiscal policy's effect on AD and decreases the magnitude of its effect on investment.
C) It increases the magnitude of a given fiscal policy's effect on AD and increases the magnitude of its effect on investment.
D) It increases the magnitude of a given fiscal policy's effect on AD and decreases the magnitude of its effect on investment.

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