Answer to Question #66719 in Macroeconomics for Thomas

Question #66719
An Increase in Government Expenditure (Fiscal Policy) will be off-set by an equal decrease in private consumption, leaving aggregate demand unchanged.' Critically discuss with reference to theory and evidence
1
Expert's answer
2017-03-24T09:55:07-0400
An Increase in Government Expenditure will be off-set by an equal decrease in private consumption, if it is financed with the increase in taxes, which will decrease consumer spending leaving aggregate demand unchanged. That's why there will be crowding-out effect.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS