The term "crowding out" refers to?
کروڈنگ آؤٹ سے کیا مراد ہے؟
- The decrease in private investment that occurs when government borrowing increases
- The increase in private investment that occurs when government borrowing decreases
- The decrease in government spending that occurs when private investment increases
- The increase in government spending that occurs when private investment decreases
Explanation
- Crowding out is a macroeconomic concept.
- It occurs when government borrows more money from the market.
- This increases interest rates and reduces private investment.
- So, private sector investment is “crowded out” by government borrowing.
Last verified on 24-04-2026
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