If the government increases its budget deficit, ________ is/are ameliorated if the economy has access to ________.

Question

Quizplus · Accepted Answer

Crowding out, which refers to the reduction in private investment due to increased government borrowing, can be ameliorated if the economy has access to foreign savings. This is because the influx of foreign capital can help finance the government's deficit without taking away from domestic investment funds.

If the Government Increases Its Budget Deficit, ________ Is/are Ameliorated