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According to Classical economists, which type of fiscal policy finan.pdf
Classical economists argue that tax increases lead to 'crowding out' by leaving businesses with less capital. This phenomenon occurred in India before the 1990s and in China prior to the 1980s, resulting in poor economic conditions. The document discusses the historical implications of fiscal policy on economic performance.
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According to Classical economists, which type of fiscal policy finan.pdf
- 1. According to Classicaleconomists, which type of fiscal policy financing produces "crowding out" A. Tax Increases B. Monetizing Debt C. Borrowing D. Charging user fees to those who use government services Solution A) Tax Increases Crowding out happens when governments increase too much tax and leaving business with less money, This happened in India before 1990s when there was socialistic economic structure and also in china, before 80's. Their economies were just super bad.