Question

In Keynesian Theory, if government increases spending that in turn causes an increase in employment and investment by the private sector would be encouraged or "_____________ ."

A. crowded in
B. crowded out
C. elbowed out
D. hammered out

Answer 1

A. crowded in

Step-by-step explanation:

Crowding in occurs when there's a slack in the economy and the government increases its deficit spending to stimulate the economy which causes an increase in employment and investment by the private sector.

Crowding out is when an increase in deficit spending by the government reduces private investment.

I hope my answer helps you.