Crowding out would most likely occur when:
A. the federal government engages in bond sales to finance its budget deficit.
B. tax receipts rise more slowly than anticipated, resulting in the need to cut government spending.
C. workers lose jobs as a result of anti-inflationary fiscal policies.
D. Congress enacts budget cuts to balance the budget.
Answer: A
Economics
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Other things equal, as the number of discouraged workers rises in an economy, the gap between potential and actual real GDP will widen
a. True b. False Indicate whether the statement is true or false
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