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What is crowding-out effect

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Reference no: EM133338331

Chapter 12, Macroeconomics: Private and Public Choice (15th, by Gwartney)

1. 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?

- For this question, I need the answer for the last part: " How does the new classical theory of fiscal policy differ from the crowding-out model?"

2. Are changes in discretionary fiscal policy likely to be instituted in a manner that will reduce the ups and downs of the business cycle? Why or why not?

3. Are changes in discretionary fiscal policy likely to be instituted in a manner that will reduce the ups and downs of the business cycle? Why or why not?

Reference no: EM133338331

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