If government saving is negative (that is, if government is running a budget deficit), crowding out might occur. Crowding out leads to all of the following EXCEPT

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Crowding out occurs when government borrowing increases, causing interest rates to rise, which in turn reduces private investment. This reduction in investment can lead to a smaller capital stock in the future and a higher real interest rate. However, it does not necessarily result in decreased private saving.

If Government Saving Is Negative (That Is, If Government Is