Which of the Following Is False

Multiple Choice

Which of the following is false?

A) Expansionary fiscal policy will tend to cause net exports to fall.
B) The larger the crowding out effect, the smaller the actual effect of a given change in fiscal policy.
C) The crowding out effect does not occur with a tax change.
D) Starting from an initial recession equilibrium, expansionary fiscal policy could potentially increase employment to the full employment level.
E) Starting from an initial recession equilibrium, a government tax increase would tend to increase the severity of the recession.