If the government starts a new program where it buys every family that lives in Florida a new air conditioner,one may argue this could lead to
A) a budget surplus.
B) a shift in aggregate supply.
C) supply-side fiscal policy.
D) a savings shift.
E) crowding-out.

Question

Quizplus · Accepted Answer

When the government increases spending, such as buying air conditioners for families, it can lead to crowding-out, where increased government spending might reduce private sector investment due to higher interest rates or resource allocation.

If the Government Starts a New Program Where It Buys