5.5 Crowding Out

Government increases deficit spending

demand increase, real interest rate increases, and private investment decreases

in the long run an increase in the real interest rate will mean _____ economic growth because investment and capital stock _____

less; decrease

crowding out refers to the decrease in

private investment due to increased borrowing by the government

crowding out

the adverse effect of government borrowing on internet sensitive private sector spending

an increase in the government budget deficit is most likely to result in an increase in which of the following

the real interest rate