Multiple Choice
Crowding out will be greater
A) the less sensitive consumption spending is to changes in the interest rate.
B) the further equilibrium GDP is below potential GDP.
C) the more sensitive investment spending is to changes in the interest rate.
D) if the economy is in recession, rather than at full employment.
E) the more sensitive consumers are to changes in the tax rate.
Correct Answer:
Verified
Correct Answer:
Verified
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