An opportunity cost that occurs because of increased government spending is

Question

Quizplus · Accepted Answer

The increased government spending leads to a higher demand for goods and services, which results in rising prices and higher interest rates. As a result, the private sector's borrowing costs increases, prompting them to cut back on investments, leading to a reduction in private sector output. This concept is known as crowding out of private sector output.

An Opportunity Cost That Occurs Because of Increased Government Spending