Which of the following is an example of an action where crowding-out could occur? A decrease in government housing subsidies causes an increase in private spending on housing. The government lowers taxes, but spending does not increase. The government increases spending but does not increase taxes, and the size of the budget deficit increases. The government invests in education, shifting the long-run aggregate supply curve to the right. The government pays $2 million to workers who have lost their jobs in the form of unemployment compensation.
Which of the following is an example of an action where crowding-out could occur? A decrease in government housing subsidies causes an increase in private spending on housing. The government lowers taxes, but spending does not increase. The government increases spending but does not increase taxes, and the size of the budget deficit increases. The government invests in education, shifting the long-run aggregate supply curve to the right. The government pays $2 million to workers who have lost their jobs in the form of unemployment compensation.
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter18: Debates In Macroeconomics Over The Role And Effects Of Government
Section: Chapter Questions
Problem 3QP
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Transcribed Image Text:Which of the following is an example of an action where crowding-out could occur?
A decrease in government housing subsidies causes an increase in private spending on
housing.
The government lowers taxes, but spending does not increase.
The government increases spending but does not increase taxes, and the size of
the budget deficit increases.
The government invests in education, shifting the long-run aggregate supply
curve to the right.
The government pays $2 million to workers who have lost their jobs in the form
of unemployment compensation.
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