Asked by macie hutchinson on May 10, 2024
Verified
Discretionary expansionary fiscal policy may not lead to _____.
A) decreased national saving
B) decreased unemployment
C) inflation
D) lower interest rates
E) crowding out
Discretionary Expansionary
Refers to fiscal or monetary policy actions initiated by a government or central bank to stimulate economic growth.
National Saving
The total amount of savings generated within a country, equal to the sum of private and public savings, often used for investment.
Crowding Out
The phenomenon where increased government spending leads to a reduction in private sector investment or spending due to higher interest rates or competition for resources.
- Digest the theories of crowding in and crowding out in the context of fiscal policy's relationship with private investment.
- Acknowledge the impact fiscal policies exert on national savings, interest rates, and investment.
- Absorb knowledge about the role of discretionary fiscal policy in shaping economic outcomes.
Verified Answer
Learning Objectives
- Digest the theories of crowding in and crowding out in the context of fiscal policy's relationship with private investment.
- Acknowledge the impact fiscal policies exert on national savings, interest rates, and investment.
- Absorb knowledge about the role of discretionary fiscal policy in shaping economic outcomes.
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