In the mainstream view, the crowding-out effect from the use of fiscal policy is
A)small, especially during a recession.
B)large, especially during a recession.
C)large because the velocity of money is high.
D)small because the velocity of money is low.

Question

Quizplus · Accepted Answer

During a recession, there is typically slack in the economy, meaning resources are underutilized, so government spending is less likely to crowd out private investment.

In the Mainstream View, the Crowding-Out Effect from the Use