When the government runs a fiscal budget deficit, they have to borrow to cover or to finance

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When the government runs a fiscal budget deficit, they have to borrow to cover or to finance the deficit from Debts Market. Critic says that will cause THE CROWDING-out effect. Crowding out can completely offset the multiplier effect of an increase in government spending. Do you agree or disagree with the statement? Provide your reasons.

Posted Date: Mar 01, 2022 03:00 AM

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When the government runs a fiscal budget deficit, they have to borrow to cover or to finance

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Expert Answer:

Agreed Reason The crowdingout effect refers to a situation where government borrowing to finance fis... View the full answer

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