The crowding-out effect refers to the possibility that deficit spending may lead people to increase their saving in anticipation of higher future taxes.

Name: The crowding-out effect refers to the possibility that deficit spending may lead people to increase their saving in anticipation of higher future taxes.
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Question

Quizplus · Accepted Answer

The crowding-out effect refers to the possibility that increased government spending may lead to a decrease in private investment due to higher interest rates, not an increase in saving.

The Crowding-Out Effect Refers to the Possibility That Deficit Spending