--%>
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 : Define Cash Basis of Accounting Cash

    Cash Basis of Accounting: The base of accounting in which expenditures and revenues are recorded whenever cash is received or distributed.

    		•
  • Q : What is Finance Letter Finance Letter

    Finance Letter (FL): The proposals made, by the Director of Finance to the chairpersons of the budget committees in each and every house, to amend the Budget Bill and the Governor's Budget from that presented on January 10 to reflect a revised plan of

    		•
  • Q : Define Overhead Unit Overhead Unit :

    Overhead Unit: The organizational unit which benefits the production of an article or a service however that can’t be directly related with an article or service to share out all of its expenditures to elements and/or work authorizations. The co

    		•
  • Q : Near monies Normal 0 false false false

    Normal 0 false false

  • Q : Describe accumulated depreciation

    Describe accumulated depreciation?Depreciation is the allocation of an asset's primary cost over time. Accumulated depreciation is the sum of all the depreciation cost that has been identified to date.

    		•
  • Q : Describe depreciation expense Describe

    Describe depreciation expense as it seems on the income statement.  Accounting depreciation is the allocation of asset's primary cost over time. Depreciation cost on an income statement is the amount of the asset=s initial cost allocated to

    		•
  • Q : Example-implicitly-weighed marginal

    Cite three example of recent decisions which you made in which you, at least implicitly, weighed marginal costs & marginal benefits.

    		•
  • Q : Selection of board of directors of

    How are the members of the board of directors of corporation selected and to whom do these board members owe their prime allegiance? Members of corporation's board of directors are chosen by the common stockholders and owe their allegiance to th

    		•
  • Q : Bg explain factors that responsible for

    explain factors that responsible for the recent surge in international market

    		•
  • Q : Explain LBO-risks for equity investors

    Explain LBO? Describe risks for the equity investors and also describe potential rewards? A leveraged buyout is purchase of publicly owned corporation through a small group of investors by using a large amount of borrowed money. The risks for

    		•