Economics · Public Expenditure Hypotheses
The 'Displacement effect' in the Peacock-Wiseman Hypothesis implies that:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Private investment displaces public expenditure during periods of economic boom.
- 2Tax revenue always exceeds public expenditure after a displacement.
- 3Public expenditure reverts to its pre-crisis level once the emergency is over.
- 4Public expenditure permanently displaces private expenditure at a higher level in the economy after a major social upheaval.✓
Correct answer
Public expenditure permanently displaces private expenditure at a higher level in the economy after a major social upheaval.
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