Crowding out occurs when
a. governments must borrow funds which causes interest rates to rise...
Crowding out occurs when
a. governments must borrow funds which causes interest rates to rise and thus private investment is reduced.
b. interest rates increase as firms spend a larger amount of resources on research and development.
c. interest rates increase because the federal reserve reduces that economy's money supply.
d. firms borrow more to expand operations which results in an increase in interest rates.
Answers: 3
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