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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FERA stands for The Federal Emergency Relief Administration. The program was renamed as a direct relief operation in Roosevelt Administration. It was a form of an unemployment insurance.
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Budget: It is a plan of operation stated in terms of financial or other resource necessities for a particular period of time.
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