Global crowding out refers to the impact that
A)excessive U.S. population growth can have on interest rates.
B)excessive global population growth can have on interest rates.
C)an excessive budget deficit in one country can have on interest rates of other countries.
D)an excessive budget deficit in one country can have on exchange rates.

Question

Quizplus · Accepted Answer

Global crowding out occurs when a country's excessive budget deficit leads to higher interest rates in other countries. This happens because the country with the deficit borrows more, increasing demand for capital on global markets, which in turn raises interest rates worldwide.

Global Crowding Out Refers to the Impact That