Sometimes crowding out effect occurs which diminishes the effectiveness of fiscal policy. 1. Explain how direct substitution

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Sometimes crowding out effect occurs which diminishes the effectiveness of fiscal policy.
1. Explain how direct substitution of public services for consumer spending can create a crowding out effect.
2 Explain how government borrowing can lead to interest rate changes that create a crowding out effect.
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Economics

ISBN: 978-1285738321

12th edition

Authors: Roger A. Arnold

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