The crowding in of private investment is associated with
A)increased investment opportunities resulting from a withdrawal of foreign investors
B)increased investment opportunities resulting from a decline in interest rates
C)a reduction in the level of government spending
D)a reduction in corporate income taxes
E)more favorable business expectations resulting from an increase in aggregate demand induced by increased government borrowing

Question

Quizplus · Accepted Answer

Crowding in occurs when increased government borrowing leads to higher aggregate demand, improving business expectations and encouraging private investment.

The Crowding in of Private Investment Is Associated with