Answered

Looking for trustworthy answers? Westonci.ca is the ultimate Q&A platform where experts share their knowledge on various topics. Discover comprehensive answers to your questions from knowledgeable professionals on our user-friendly platform. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.

Assume that if there were no crowding out, an increase in government spending would increase GDP by $100 billion. On the other hand, if there had been full crowding out, then GDP would have

Sagot :

Tutorconsortium330

If there had been full crowding out, then GDP would have increased by less than $100 billion.

What is the meaning of crowding out?

Most often, borrowing is used by nations to cover their budget deficits. When governments borrow, they are in competition with everyone else in the economy for the limited quantity of savings that are available. This rivalry causes the real interest rate to rise and private investment to fall. The term "crowding out" refers to this process.

Affect on economic growth

Because of the "crowding out effect," which prevents private investment from growing as much as it would have otherwise, economic growth is slowed down. With a smaller capital stock, the economy will experience slower development in terms of output and labor's marginal productivity.

Learn more about crowding out here:

https://brainly.com/question/7455899

#SPJ4

Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Your questions are important to us at Westonci.ca. Visit again for expert answers and reliable information.