If crowding out occurs, the Main Burden of the debt is
A)smaller government assets passed along to the next generation.
B)smaller capital stock passed along to the next generation.
C)fewer government services during this generation.
D)higher debt payments passed along to the next generation.

Question

Quizplus · Accepted Answer

Crowding out occurs when government borrowing leads to higher interest rates, which in turn reduces private investment. This reduction in investment results in a smaller capital stock being passed along to the next generation.

If Crowding Out Occurs, the Main Burden of the Debt