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The Long-Run Opportunity Cost of Government Spending Crowding Out Private

Question 101

Multiple Choice

The long-run opportunity cost of government spending crowding out private investment:


A) equals about 10 percent of GDP.
B) lowers interest rates and results in lower interest income for U.S.resource owners.
C) would be greater if the government's expenditures were invested in building better highways and a more educated workforce.
D) results from the corresponding contractionary gap.
E) would be greater if the government's expenditures were devoted to increasing retirement benefits rather than to educating the work force.

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