Crowding out influence
What is the crowding out influence and why might it be relevant to fiscal policy?
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The crowding-out effect is the decrease in investment spending caused through the increase in interest rates arising from an rise in government spending, financed by borrowing. The raise in G was designed to rise AD but the resulting rise in interest rates may decrease I. Therefore the impact of the expansionary fiscal policy may be decreased
Why is the coefficient of variation a better risk measure to employ than the standard deviation while evaluating the risk of capital budgeting projects? The coefficient of variation is a better risk measure than the standard deviation alone sinc
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