Crowding out is an important topic.
A. Use a graph of the market for loanable funds to show how the severity of crowding out depends on the slope of the supply curve.
B. Use a graph of the investment demand curve to demonstrate how the severity of crowding out depends on slope of the firms’ demand for investment goods.
C. In a couple of sentences, explain how expansionary fiscal policy can lead to lower rates of long-term economic growth.