1
answer
0
watching
65
views
18 Aug 2020
The crowding-out effect of borrowing to finance the increases in government expenditures
a. reduces current spending for private investment.
b. increases the privately owned stock of capital.
c. reduces the economic burden on future generations.
d. increases incentives to innovate.
The crowding-out effect of borrowing to finance the increases in government expenditures
a. reduces current spending for private investment.
b. increases the privately owned stock of capital.
c. reduces the economic burden on future generations.
d. increases incentives to innovate.
Alice SejakeLv10
7 Oct 2020
Related textbook solutions
Related questions
Why does sound finance not depend on the Ricardian equivalence theorem?
| The Ricardian equivalence theorem says that people increase their savings in anticipation of an increase in taxes in the future to pay for that deficit. | |
| Sound finance is based on political grounds, not economic principles. | |
| The Ricardian equivalence theorem says that interest rates will rise when government increases expenditures, fully crowding out private investment. | |
| Sound finance says that governments should make spending and taxing decisions based on their effect on the economy, not moralistic principles. |
