When a decrease in one or more components of private spending completely offsets an increase in government spending,there is
A) incomplete crowding out.
B) zero crowding out.
C) complete crowding out.
D) complete crowding in.
E) either c or d

Question

Quizplus · Accepted Answer

Crowding out occurs when government spending increases and crowds out private sector spending. If the increase in government spending is completely offset by a decrease in private sector spending, then there is no net increase in overall spending. This is known as complete crowding out because the government's increase in spending has no positive impact on the economy.

When a Decrease in One or More Components of Private