A decrease in private sector borrowing and spending caused by increased government borrowing is

Question

Quizplus · Accepted Answer

Crowding out refers to a situation where increased government borrowing causes a decrease in private sector borrowing and spending. This happens because the increased government borrowing pushes up interest rates, making it more expensive for the private sector to borrow and invest. As a result, private sector borrowing and spending decrease, which can lead to a decrease in economic growth.

A Decrease in Private Sector Borrowing and Spending Caused by Increased