The Federal Reserve econometric model estimates that it takes __________ for crowding out to reduce the impact of a 1 percent increase in government spending, with the money supply held constant, to zero.
A) 2 years
B) 3 years
C) 4 years
D) Crowding out never reduces the impact to zero.

Question

Quizplus · Accepted Answer

The Federal Reserve econometric model estimates that it takes 3 years for crowding out to reduce the impact of a 1 percent increase in government spending, with the money supply held constant, to zero.

The Federal Reserve Econometric Model Estimates That It Takes __________