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
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What do you mean by Authorized: Provided the force of law (example, by statute). For certain action or quantity to be authorized, it should be possible to recognize the enabling source and date of approval.
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