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Can government spending that causes crowding out be detrimental to long-run
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- The government of a country decides to double its current level of spending, causing real GDP to increase from $20,000 to $120, 000. What is the percent change in real GDP?If taxes are reduced , will most people save more or less than before ? Does national saving rise or fall? Explain .If taxes are increased, will most people save more or less than before? Does national saving rise or fall? Explain.
- explain the keynesian theory of high public spending to stimulate economic growth?What is a fiscal policy tool used to stimulate economic growth during a recession? A. Increasing government spending B. Reducing taxes C. Selling government bonds D. Reducing government spendingHow does tax cuts encourage saving and investment