cailonjj9314 cailonjj9314

01-12-2017
Business

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Holding all else constant while government is borrowing to cover budget deficits, the crowding out concept suggests interest rates ________ borrowing and spending by business and households.

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meerkat18 meerkat18

12-12-2017

If the government has a budget deficit, crowding out might occur. Crowding out leads to all of the following; a higher real interest rate, a smaller capital stock in the future and a decreased quantity of investment. Borrowing from the rest of the world Government budget surpluses, private saving.

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