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The crowding-out effect limits investment in the private sector. The crowding-out effect occurs when the government runs a deficit and must borrow money from the loanable funds market. By borrowing money, they decrease the amount of savings available in the market and the real interest rate rises. The increase in the real interest rate lowers investment by businesses.
What else can I help you with?
Expansionary fiscal policy?
is a policy that have no demand
Expansionary fiscal policy is so named because it?
Expansionary fiscal policy is so named because it is designed to expand real GDP.
What is the purpose of expansionary fiscal policy?
increase gvt exp
When does the government assume an expansionary fiscal policy position?
when it is weak
What is non monetised deficit?
Effect of expansionary fiscal policy which increases money demand and r but money supply reman constant
Expansionary fiscal policy?
is a policy that have no demand
What is expansionary fiscal policy?
Expansionary fiscal policy is an increase in government spending or a reducing in net taxes which increase aggregate output/income (Y). +G or -T = +Y
Expansionary fiscal policy is so named because it?
Expansionary fiscal policy is so named because it is designed to expand real GDP.
What is called deficit spending?
expansionary fiscal policy position
What is the purpose of expansionary fiscal policy?
increase gvt exp
When does the government assume an expansionary fiscal policy position?
when it is weak
Which of the following is an example of expansionary fiscal policy?
cutting taxes
What is non monetised deficit?
Effect of expansionary fiscal policy which increases money demand and r but money supply reman constant
Strongest tool of expansionary fiscal policy?
More public expenditure
Is also called deficit spending?
expansionary fiscal policy position
Which of these is also called deficit spending?
expansionary fiscal policy position
What should be a future effect upon the economy if a expansionary fiscal policy continues in an economy with an increasing budget deficit and growing national debt?
high inflation
