Economics · Public Finance
The 'displacement effect' in the Peacock-Wiseman hypothesis implies:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1An upward displacement of public expenditure corresponding to higher economic growth
- 2The movement from an older level of public expenditure and taxation to a newer and higher level✓
- 3Public expenditure increases at a steady rate and reaches a higher level
- 4The government undertakes newer activities and hence public expenditure rises continuously
Correct answer
The movement from an older level of public expenditure and taxation to a newer and higher level
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