Which term refers to the fall in investment due to government borrowing?
A) the neutrality of money
B) the vicious circle
C) comparative advantage
D) crowding out

Question

Quizplus · Accepted Answer

Crowding out refers to the decline in private investment that occurs as a result of increased government borrowing. When the government borrows more money, it absorbs some of the available capital and leaves less for private individuals and businesses to invest. This can lead to a decrease in overall investment and slower economic growth.

Which Term Refers to the Fall in Investment Due to Government