Economists who believe in complete crowding out would argue that

Question

Quizplus · Accepted Answer

Economists who believe in complete crowding out argue that increased government spending leads to a decline in private sector spending, which completely offsets the job creation or saving effects of government spending. Therefore, option B is the correct answer. Option A is incorrect as it suggests that private sector spending will increase simultaneously with government spending, which is not the case with complete crowding out. Option C is incorrect because complete crowding out implies that government policies intended to stimulate aggregate demand will be completely ineffective. Option D is also incorrect because economists who believe in complete crowding out argue against the effectiveness of government policies intended to stimulate aggregate demand. Option E is incorrect as option A contradicts option C.

Economists Who Believe in Complete Crowding Out Would Argue That