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Crowding out of private domestic investment

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How might federal deficits crowd out private domestic investment? How does this crowding out affect future living standards?

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The solution discusses crowding out of private domestic investment because of federal deficits.

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How might federal deficits crowd out private domestic investment? How does this crowding out affect future living standards?

There are three different ways in which a national government can fund its spending: 1) taxes 2) printing money 3) borrowing.
When the government has an expansionary fiscal policy, runs a deficit and finances this deficit through borrowing, crowding out takes place. The expansionary fiscal policy and large government ...

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