Assume and economy is in recession and the government is considering using fiscal stimulus measures to boost spending , production and employment. a)Explain how "crowding out" can harm productivity growth b) explain how the crowding out problem associated with increase government spending can be avoided. identify any additional policy needed.

Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter30: Government Budgets And Fiscal Policy
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Problem 38CTQ: Why is spending by the U.S. government on scientific research at NASA fiscal policy while spending...
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Assume and economy is in recession and the government is considering using fiscal stimulus measures to boost spending , production and employment.

a)Explain how "crowding out" can harm productivity growth

b) explain how the crowding out problem associated with increase government spending can be avoided. identify any additional policy needed.

 

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