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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

Under what condition would crowding out not inhibit long-run economic growth? Under what condition would crowding out impede long-run economic growth?

To determine

To state: The conditions that crowds out and exhibit the economic growth.

Explanation

Crowding out investment is defined as the investment where the private firms are available with less amount of financial capital with the high rate of interest. When the budget deficit increases, the government needs more amount of cash for financing the spending.

The demand for the financial capital increases in the economy...

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