When government borrowing decreases private investment by raising the market interest rate,this is known as

Name: When government borrowing decreases private investment by raising the market interest rate,this is known as
Brand: Quizplus
Rating: 4.9 (56 reviews)

Question

Quizplus · Accepted Answer

Crowding out occurs when government borrowing competes with private borrowing, resulting in a higher market interest rate. This higher rate can discourage private investment, which in turn decreases economic growth.

When Government Borrowing Decreases Private Investment by Raising the Market