When private firms cancel investment programs because of increases in the interest rate caused by government borrowing it is called

Name: When private firms cancel investment programs because of increases in the interest rate caused by government borrowing it is called
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Crowding out occurs when increased government borrowing leads to higher interest rates, which in turn causes private firms to cancel investment programs. This is a result of the limited supply of available loanable funds in the market.

When Private Firms Cancel Investment Programs Because of Increases in the Interest