Ask Question
12 June, 08:38

Suppose that government purchases rise by $100 billion and together consumption and investment decline by a total of $80 billion.

This is an example of:

a) complete crowding out.

b) zero crowding out.

c) incomplete crowding out.

d) an activity that shifts the AD curve to the left.

e) b and d

+3
Answers (1)
  1. 12 June, 08:43
    0
    a) complete crowding out.

    Explanation:

    This is an example of crowding out effect, when government increases it's involvement in a market, such that it reduces private sector investment, it is called crowding out
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Suppose that government purchases rise by $100 billion and together consumption and investment decline by a total of $80 billion. This is ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers