Question

Which of the following U.S. policies and institutions may negatively influence U.S. long-run economic growth?

A. The government has directly supported economic growth through its support of public education as well as research and development.
B. The government's persistently large borrowing may make financing additional improvements in infrastructure and education (a phenomenon known as "crowding out"), consequently slowing economic growth.
C. The economy has attracted significant savings, both domestic and foreign, that have allowed investment spending to spur the growth of the capital stock and fund research and development.
D. The country has been politically stable, and its laws and institutions protect private property.

Answer 1

B. The government's persistently large borrowing may make financing additional improvements in infrastructure and education (a phenomenon known as "crowding out"), consequently slowing economic growth.

Step-by-step explanation:

In economics, the term, 'crowding out' is defined as a phenomenon which occurs when the increased government involvement in the sector of market economy substantially affects and influences the remainder of the market, may be either on supply or the demand side of the market.

A high magnitude of crowding out effect can lead to the lesser income of the economy.

When the government make large borrowings to make the financing additional improvements in the infrastructure and in education a slowing economic growth, it negatively effects or influences the long run economic growth of the United States.