Question
Asked Nov 28, 2019
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Suppose that the government reduces spending on highway construction by $10 billion . Which way does the aggregate-demand curve shift? Explain why the shift might be larger or smaller than $10 billion.

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Expert Answer

Step 1

Crowding out effect:

It refers to the situation that occurs when there is a rise in government involvement in the sector...

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BusinessEconomics

Aggregate Demand

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