Problem
Assume that the expenditure and tax multipliers can be estimated to be 0.75 and 0.5 respectively.
a) Would you recommend expansionary fiscal policy based on tax cuts or increased government expenditures?
b) Suppose now that there is substantial evidence that supports the hypothesis of a crowding out effect in this economy. How would your answer to b) change?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.