An increase in government borrowing can: _________. allow private investment to expand. crowd out private investment in physical capital. increase the incentive to invest in technology. cause a substantial decrease in interest rates.

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01-08-2017
Business

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An increase in government borrowing can: _________. allow private investment to expand. crowd out private investment in physical capital. increase the incentive to invest in technology. cause a substantial decrease in interest rates.

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andriansp andriansp · Answer 1 · 2017-08-08T11:39:17+02:00

An increase in government borrowing can: crowd out private investment in physical capital
Phtsical capital is the type of assets that have an actual appearance (not only on paper), such as machinary, buildings, bridge, etc.
An increase in government borrowing means that more government budget is used to buy these physical capital and more private sector's budget available to use for somehting else