Crowding Out
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If this claim is real then what happens to consumption and investment?
the are lower than they would be
What is crowding out?
the claim that the government spedning reduces private spending, and increases interest rates
If this claim is real what happens to AD?
AD shifts right due to the increase in G and then left due to the decrease in C,I
If this claim is real then what happens to G?
it might go up