Question: Question 3 2 :When economists warn about the crowding - out effect, they are referring to when:Correct Answer: d . government borrowing reduces private investment.The

Question

32

:When economists warn about the crowding

-

out effect, they are referring to when:Correct Answer: d

.

government borrowing reduces private investment.The crowding

-

out effect occurs when increased government borrowing drives up interest rates, making it more expensive for businesses and individuals to borrow, thereby reducing private investment.Confidence:

5 / 5

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