29. (Problem 7) Which of the following U.S. policies and institutions may negati

Question

29. (Problem 7) Which of the following U.S. policies and institutions may negatively influence U.S. long-run economic growth? A. The economy has attracted significant savings, both domestic and foreign, that have allowed investment spending to spur the growth of the capital stock and fund research and development. B. The government's persistently large borrowing may make financing additional improvements in infrastructure and education (a phenomenon known as "crowding out"), consequently slowing economic growth. C. The country has been politically stable, and its laws and institutions protect private property. D. The government has directly supported economic growth through its support of public education as well as research and development.

Explanation / Answer

B. The government's persistently large borrowing may make financing additional improvements in infrastructure and education (a phenomenon known as "crowding out"), consequently slowing economic growth.

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