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Eduncle posted an MCQ
October 17, 2019 • 21:18 pm 0 points
  • UGC NET
  • Economics

By 'financial crowding out' economists mean

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    Eduncle Best Answer

    The term "crowding out" refers to the reduction in private expenditures on consumption and investment caused by an increase in government expenditure which increases aggregate demand and hence interest rates. The amount by which private expenditures fall with a given increase in government expenditure is called the crowding out effect.

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