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Sagot :
Final answer:
The crowding out effect in economics relates to decreased private-sector investment due to government deficit spending and increased demand for loanable funds causing higher interest rates.
Explanation:
The "crowding out effect" refers to the reduction in private-sector investment that results from government deficit spending. The government's borrowing increases the demand for loanable funds, leading to higher interest rates, which in turn decreases private-sector borrowing for investments.
Learn more about Crowding out effect here:
https://brainly.com/question/41960784
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