To compensate for the possibility of indirect crowding out, a government engaging in expansionary policy aimed at eliminating a recessionary gap could
A)increase spending less than the simplest Keynesian model would predict.
B)increase spending more than the simplest Keynesian model would predict.
C)reduce taxes rather than increase government spending.
D)both reduce taxes and reduce spending to be able to achieve full employment.

Question

Quizplus · Accepted Answer

The Answer of To compensate for the possibility of indirect crowding out, a government engaging in expansionary policy aimed at eliminating a recessionary gap could
A)increase spending less than the simplest Keynesian model would predict.
B)increase spending more than the simplest Keynesian model would predict.
C)reduce taxes rather than increase government spending.
D)both reduce taxes and reduce spending to be able to achieve full employment.

To Compensate for the Possibility of Indirect Crowding Out, a Government