Government borrowing in the private investment market that results in competition with businesses for available capital refers to what term?Government securitiesCrowding outFree enterprisePublic sector borrowin
Question
Government borrowing in the private investment market that results in competition with businesses for available capital refers to what term?Government securitiesCrowding outFree enterprisePublic sector borrowin
Solution
The term you're looking for is "Crowding out."
Here's the step-by-step reasoning:
- Identify the context: The question is about government borrowing in the private investment market.
- Understand the impact: This borrowing results in competition with businesses for available capital.
- Match the definition: The term that describes this scenario is "Crowding out," where increased government borrowing leads to reduced availability of funds for private sector investment.
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