A decline in the investment share of GDP due to an increase in government purchases is known as
A)investment blackout.
B)devestment.
C)crowding out.
D)None of these

Question

Quizplus · Accepted Answer

The phenomenon of a decline in the investment share of GDP due to an increase in government purchases is known as crowding out. This happens because an increase in government purchases can lead to a decrease in the availability of funds for private investment, ultimately reducing the investment share of GDP. Therefore, option C is the correct answer. The other options, including investment blackout and devestment, do not accurately describe the phenomenon.

A Decline in the Investment Share of GDP Due to an Increase