One potential implication of the use of fiscal policy is crowding out
What will be an ideal response?
Basically, crowding out refers to the idea that since the government steps in to affect the economy, there may be a reduction in the availability of funds for private investment; this investment gets crowded out by the government use of funds
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A business firm should refuse to sell any item for which it cannot obtain a price at least as large as what
A) it cost the firm to produce the particular item. B) it costs the firm on average to produce the item. C) it would cost the firm to produce another item identical to the item being sold. D) the item will be worth to the firm if not sold.
Suppose an individual can earn 3 percent interest on an annual term deposit. His opportunity cost of holding $100,000 in cash instead of investing in the term deposit will be: a. $3,300
b. $330. c. $1,000. d. $6,000. e. $3,000.