Question

The crowding out of private spending by government spending will be greater the

Answer 1

Answer:

More sensitive consumption, investment, and net exports are to changes in interest rates

Explanation:

If the government pursues expansionary fiscal policy when the economy is not depressed, this can lead to a reduction in private investment in the long run. This is because expansionary fiscal policy leads to an increase in real GDP, which in turn increases money demand and the equilibrium interest rate. However, the increase in the interest rate also lead to a decrease in private consumption and investment.

Answer 2

The greater the expenditure the Government eats the greater the economic growth.

Further explanation

Fiscal is used to explain the form of state revenue collected from the community and is considered by the government as income and then used as expenditures with programs to produce attainment of national income, production, and economy and is used as a balance tool in the economy.

Whereas fiscal policy is one of the factors that shape the country's economic direction.

3 Main Objectives of Fiscal Policy

1. Economic Growth

Achieving high levels of economic growth is one of the main objectives of fiscal policy. When economic growth develops rapidly, the business automatically will also grow, of course, this causes more income for people. Of course, this also increases the overall welfare of the nation.

Minimizing taxes is the government's way to advance economic growth through fiscal policy. Higher government spending can also spur economic growth.

2. Work

Opening high employment is one of the objectives of fiscal policy. Unemployed workers tend to have less money to spend than workers with jobs. This tends to hamper economic growth.

Minimize taxes aimed at promoting economic growth and business expansion. Simultaneously, this can encourage recruitment and increase employment.

3. Economic Stability

Stabilizing the economy by minimizing the impact of fluctuations is also the goal of fiscal policy in the economy. The country's economy tends to follow a pattern of global economic expansion, or "boom," followed by an economic slowdown, or "busts."

Learn more

Fiscal policy brainly.com/question/6583917, brainly.com/question/6583917

Details

Class: High School

Subject: Business

Keyword: Effect of government personal expenditure.