Among the economists who believe that an increase in government spending is likely to remove the economy from a recessionary gap are those who believe in the existence of complete crowding out.

Question

Quizplus · Accepted Answer

Economists who believe in complete crowding out argue that an increase in government spending will lead to a corresponding decrease in private sector spending, offsetting any positive effects on the economy. Therefore, they would not believe that an increase in government spending is likely to remove the economy from a recessionary gap.

Among the Economists Who Believe That an Increase in Government