--%>
Assignment Help - homework help

Crowding out influence

What is the crowding out influence and why might it be relevant to fiscal policy?  

E

Expert

Verified

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

   Related Questions in Finance Basics

  • Q : Describe primary reasons that companies

    Describe primary reasons that companies hold cash? Companies hold cash to make essential payments, to take benefit of opportunities as they arise, and to cover unforeseen emergencies.

    		•
  • Q : What is an Investment Management

    Investment Management: It has two general definitions, one associating to advisory services and the other associated to corporate finance. In the initial instance, a financial advisor or services company gives inve

    		•
  • Q : None what are the disadvantages of

    what are the disadvantages of working capital

    		•
  • Q : What do analyze in pro forma financial

    Normal 0 false false

  • Q : What is Fingerprint biometrics

    Fingerprint biometrics has basically three main application ground: Large-scale Automated Finger Imaging System for law enforcement Fraud prevention in entitlement programs Access control for facilities or computers.

  • Q : Define Settlements Settlements : It

    Settlements: It refers to any proposed or final settlement of the legal claim (generally a suit) against the state. Approval of payments and settlements for settlements are subject to several controls.

    		•
  • Q : Define Workload Workload : The

    Workload: The measurement of rises and reduces of inputs or demands for work, and an ordinary basis for projecting related budget requires for both established and new programs. This approach to BCPs is frequently viewed as an alternative to outcome o

    		•
  • Q : Value $100 is received at the beginning

    $100 is received at the beginning of year 1, $200 is received at the beginning of year 2, and $300 is received at the beginning of year 3. If these cash flows are deposited at 12 percent, their combined future value at the end of year 3 is

    		•
  • Q : Define Cost-of-Living Adjustments

    Cost-of-Living Adjustments (COLA): Increases offered in state-funded programs which comprise periodic adjustments predetermined in state law (statutory, like K-12 education apportionments), or established at optional levels (that is discretionary) by

    		•
  • Q : What is Revenue Revenue : Any adding up

    Revenue: Any adding up to cash or other current assets which does not raise any liability or reserve and does not symbolize the reduction or recovery of expenditure (example, reimbursements or abatements). Revenues are a kind of receipt usually derive

    		•