ALL Crowding-Out FRQ's
Understand that the College Board doesn't use the phrase Crowding-Out
in the FRQ's but when Government (Deficit) Spending increases
it reduces the SLF or increases the DLF driving up the RIR (Real Interest Rate)
Private Investment is Crowded-Out of the Loanable Funds Market
In essence, these investors can't get cheap loans to create factories, equipment etc
all because of the government borrowing
also,, taking it a step further
In the Long-Run
when RIR's increase there is less investment
less capital formation and less LR Growth
2014 AP Macroeconomics Exam
2010 AP Macroeconomics Exam
2008 AP Macroeconomics Exam
2005 AP Macroeconomics Exam
