Author Question: Does government borrowing crowd out private sector spending?[br][br][b][color=#165FFA]Question ... (Read 71 times)

skymedlock

  • Hero Member
  • *****
  • Posts: 561
Does government borrowing crowd out private sector spending?

Question 2

A strong U.S. dollar is one that has:
 a. c and e.
  b. d and e.
  c. depreciated.
  d. appreciated.
  e. helped U.S. exporters.



kingfahad97

  • Sr. Member
  • ****
  • Posts: 308
Answer to Question 1

Crowding out refers to government deficit spending financed by borrowing that increases interest rates and thereby reduces private borrowing and spending. The crowding out effect probably exists, but to what extent is debatable. If deficit spending is used to increase our nation's production possibilities through public investment in infrastructure, then the crowding out effect is reduced. However, history shows that rarely is there a significant amount of any deficit allocated toward productive-enhancing public investment infrastructure. The extent of a crowding-out effect is important because any crowding out renders fiscal policy less effective in stimulating the economy during a recession.

Answer to Question 2

d



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Thyroid conditions may make getting pregnant impossible.

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Did you know?

The people with the highest levels of LDL are Mexican American males and non-Hispanic black females.

Did you know?

Women are 50% to 75% more likely than men to experience an adverse drug reaction.

Did you know?

Approximately 500,000 babies are born each year in the United States to teenage mothers.

For a complete list of videos, visit our video library