The enormous budget deficits of 2009 through 2011 meant that the federal government was borrowing upwards of $1.5 trillion per year. If that borrowing had limited the ability of the private sector to get financial capital for its purposes economists would call this crowding out. There was

Question

Quizplus · Accepted Answer

Crowding out occurs when government borrowing limits the availability of financial capital for the private sector, which can lead to increased interest rates. However, during the period of massive budget deficits from 2009-2011, interest rates were actually very low, suggesting that there was little evidence of crowding out. Therefore, option B is the correct answer.

The Enormous Budget Deficits of 2009 Through 2011 Meant That