Economics Crowding Out Questions
The long-term effects of crowding out refer to the negative consequences that occur when increased government spending leads to a decrease in private sector investment. These effects can include reduced economic growth, lower productivity, and limited job creation. Additionally, crowding out can lead to higher interest rates and increased government borrowing, which can result in a higher national debt and potential fiscal instability. Overall, the long-term effects of crowding out can hinder economic development and limit the potential for private sector expansion.