Multiple Choice
Crowding out is a reduction in private investment caused by government budget deficits,and may partially offset the expansionary effects of fiscal policy.The exact degree of crowding out depends on all of the following except
A) how much of the deficit is financed by households, firms, and governments outside of Canada.
B) how much real interest rates increase.
C) the level of the marginal corporate income tax rate.
D) the sensitivity of investment to the real interest rate.
Correct Answer:
Verified
Correct Answer:
Verified
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