The impact of crowding out may be the least
A)during a deep recession.
B)when real GDP is above but close to potential GDP.
C)during an expansion.
D)when real GDP is below but close to potential GDP.

Question

Quizplus · Accepted Answer

During a deep recession, there is typically underutilized economic capacity, meaning that increased government spending is less likely to lead to crowding out of private investment, as there is ample room for both to grow without competing for the same resources.

The Impact of Crowding Out May Be the Least