Question

Your textbook's discussion of crowding out, and of government deficits, suggests these factors can negatively impact a country's economy. Think about the U.S. economy in recent years in relation to government budget deficits and potential crowding out. Do you think these have been major issues inhibiting the functioning/growth of the economy?

Answer 1

Yea. Both issues are important and limit the functioning and economic growth.

Step-by-step explanation:

Exclusion limits the growth and functioning of the economy, since it takes a specific part of the demand for consumption in the market. On the other hand, recurrent deficits remove part weaken the government and remove the confinement of the private sector, in addition to increasing inflation. Therefore, both issues are important and inhibit the functioning of the economy as well as its growth.