Both the Crowding-Out Effect and New Classical Model Indicate That

Multiple Choice

Both the crowding-out effect and new classical model indicate that

A) expansionary fiscal policy is a highly effective weapon with which to fight an economic downturn.
B) restrictive fiscal policy is a highly effective weapon with which to control inflation caused by excess demand.
C) there are side effects of budget deficits that will substantially, if not entirely, offset their expansionary impact on aggregate demand.
D) fiscal policy can be used effectively to restrain inflation but it is largely ineffective as a weapon against recession.