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Question 59 · Economy

Q59Economy

Which one of the following best describes the 'Crowding Out Effect' in the context of fiscal policy?

AA situation where private investment increases due to increased Government spending
BA situation where Government borrowing leads to higher interest rates, which reduces private investment
CA situation where an increase in taxes leads to increased private sector investment
DA situation where Government spending has no impact on aggregate demand

Answer Keys

Vision IASNot released
Vajiram & RaviNot released
Drishti IASNot released
Shankar IASNot released
Official UPSCNot released
Stategy IAS
B

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