One reason that some people oppose the government's high deficit spending is that they believe that it will drive up interest rates and undermine the ability of private firms to invest.This argument is based on _____.

Question

Quizplus · Accepted Answer

This argument is based on the concept of crowding out, which refers to the government borrowing so much money that it leads to a reduction in the amount of funds available for private investment, causing interest rates to rise. This can make it more expensive for private firms to borrow money and invest in new projects, which can ultimately hurt economic growth.

One Reason That Some People Oppose the Government's High Deficit