Respuesta :

Crowding out due to government borrowing occurs when government borrowing increases the interest rate.

What is crowding out?

Crowding out is when the government runs a budget deficit and as a result have to borrow. With government borrowing, interest rate increases. The interest rate becomes so high that the private sector individuals are unable to borrow.

To learn more about crowding out, please check: https://brainly.com/question/7455899

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Universidad de Mexico