CUET Commerce Exam  >  CUET Commerce Questions  >  How does the crowding-out effect impact priva... Start Learning for Free
How does the crowding-out effect impact private investment in the context of increasing government borrowing?
  • a)
    It encourages more private investment
  • b)
    It leads to lower interest rates
  • c)
    It raises interest rates, reducing private sector investment
  • d)
    It has no significant impact on investment
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
How does the crowding-out effect impact private investment in the cont...
The crowding-out effect occurs when increased government borrowing raises interest rates, which subsequently reduces private sector investment. With government deficits absorbing a significant portion of available capital, there are fewer resources available for private investment, especially in a context where household savings are declining.
Explore Courses for CUET Commerce exam

Top Courses for CUET Commerce

How does the crowding-out effect impact private investment in the context of increasing government borrowing?a) It encourages more private investmentb) It leads to lower interest ratesc) It raises interest rates, reducing private sector investmentd) It has no significant impact on investmentCorrect answer is option 'C'. Can you explain this answer?
Question Description
How does the crowding-out effect impact private investment in the context of increasing government borrowing?a) It encourages more private investmentb) It leads to lower interest ratesc) It raises interest rates, reducing private sector investmentd) It has no significant impact on investmentCorrect answer is option 'C'. Can you explain this answer? for CUET Commerce 2024 is part of CUET Commerce preparation. The Question and answers have been prepared according to the CUET Commerce exam syllabus. Information about How does the crowding-out effect impact private investment in the context of increasing government borrowing?a) It encourages more private investmentb) It leads to lower interest ratesc) It raises interest rates, reducing private sector investmentd) It has no significant impact on investmentCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CUET Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for How does the crowding-out effect impact private investment in the context of increasing government borrowing?a) It encourages more private investmentb) It leads to lower interest ratesc) It raises interest rates, reducing private sector investmentd) It has no significant impact on investmentCorrect answer is option 'C'. Can you explain this answer?.
Solutions for How does the crowding-out effect impact private investment in the context of increasing government borrowing?a) It encourages more private investmentb) It leads to lower interest ratesc) It raises interest rates, reducing private sector investmentd) It has no significant impact on investmentCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CUET Commerce. Download more important topics, notes, lectures and mock test series for CUET Commerce Exam by signing up for free.
Here you can find the meaning of How does the crowding-out effect impact private investment in the context of increasing government borrowing?a) It encourages more private investmentb) It leads to lower interest ratesc) It raises interest rates, reducing private sector investmentd) It has no significant impact on investmentCorrect answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of How does the crowding-out effect impact private investment in the context of increasing government borrowing?a) It encourages more private investmentb) It leads to lower interest ratesc) It raises interest rates, reducing private sector investmentd) It has no significant impact on investmentCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for How does the crowding-out effect impact private investment in the context of increasing government borrowing?a) It encourages more private investmentb) It leads to lower interest ratesc) It raises interest rates, reducing private sector investmentd) It has no significant impact on investmentCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of How does the crowding-out effect impact private investment in the context of increasing government borrowing?a) It encourages more private investmentb) It leads to lower interest ratesc) It raises interest rates, reducing private sector investmentd) It has no significant impact on investmentCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice How does the crowding-out effect impact private investment in the context of increasing government borrowing?a) It encourages more private investmentb) It leads to lower interest ratesc) It raises interest rates, reducing private sector investmentd) It has no significant impact on investmentCorrect answer is option 'C'. Can you explain this answer? tests, examples and also practice CUET Commerce tests.
Explore Courses for CUET Commerce exam

Top Courses for CUET Commerce

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev