Question: What is the crowding-out effect? How does it modify the implications of the basic Keynesian model with regard to fiscal policy? How does the new

What is the crowding-out effect? How does it modify the implications of the basic Keynesian model with regard to fiscal policy? How does the new classical theory of fiscal policy differ from the crowding-out model?

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The crowdingout effect is an economic phenomenon that occurs when increased government spending often as a result of fiscal policy leads to a decrease ... View full answer

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