Evidence from the Great Depression suggests that the crowding out effect:
A)was minimal then.
B)had a very detrimental effect on private savings.
C)can be quite large in times of recession,and is reinforced with recent research from 2008.
D)may hold,although the evidence is somewhat contradictory.

Question

Quizplus · Accepted Answer

During the Great Depression, the crowding out effect was minimal because there was a lot of unused capacity and resources, meaning government spending did not significantly displace private investment.

Evidence from the Great Depression Suggests That the Crowding Out