5. Can the government and the central bank work together to
prevent crowding out effect? Use...
50.1K
Verified Solution
Link Copied!
Question
Economics
5. Can the government and the central bank work together toprevent crowding out effect? Use an IS-LM diagram to explain thesteps. What should be done by the government and the central bank?Explain your answer.
Answer & Explanation
Solved by verified expert
4.1 Ratings (783 Votes)
Yes crowding out effect can be prevented by simultaneous mix ofexpansionary fiscal policy and expansionary monetary policyHigher government purchase increases budget deficit ceterisparibus so government borrowing increases for deficit
See Answer
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
