It is possible for an increase in government spending to encourage, instead of crowding out, private
investment.

Question

Quizplus · Accepted Answer

If the increase in government spending is directed towards infrastructure projects or other investments that improve the business environment, it can encourage private investment and lead to economic growth. Additionally, increased government spending can stimulate demand for goods and services, leading to increased production and investment by the private sector.

It Is Possible for an Increase in Government Spending to Encourage