The United States Is Experiencing a Recession and Congress Decides

Multiple Choice

The United States is experiencing a recession and Congress decides to adopt an expansionary fiscal policy to stimulate the economy. In this case, the crowding-out effect suggests that investment spending
Will

A) increase, thus partially offsetting the fiscal policy.
B) increase, thus partially reinforcing the fiscal policy.
C) decrease, thus partially offsetting the fiscal policy.
D) decrease, thus partially reinforcing the fiscal policy.