Crowding out occurs when public provision of a good substitutes for private provision.

Name: Crowding out occurs when public provision of a good substitutes for private provision.
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Crowding out refers to the decrease in private investment that occurs when the government provides a good or service that the private sector would normally provide. This results in a substitution effect where private provision is crowded out by public provision.

Crowding Out Occurs When Public Provision of a Good Substitutes