What is the crowding-out effect

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asked Aug 26, 2017 113k views

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What is the crowding-out effect

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high-school

Pben asked

by Pben

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Definition: A situation when increased interest rates lead to a reduction in private investment spending such that it dampens the initial increase of total investment spending is called crowding out effect.

Spialdor answered Aug 28, 2017

by Spialdor

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It is the loss of funds for private investment due to government borrowing.

The Governor answered Sep 2, 2017

by The Governor

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