According to the traditional (crowding-out)view,budget deficits will

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According to the traditional (crowding-out) view, budget deficits will increase interest rates and retard private investment. The reason for this is that when the government borrows money to finance deficits, it competes with private borrowers for funds, thereby driving up interest rates. This, in turn, makes it more expensive for businesses to borrow money to invest in capital goods, leading to a reduction in private investment.

According to the Traditional (Crowding-Out)view,budget Deficits Will