Crowding Out
AP Macroeconomics · Flashcards · Recall
AP MACROECONOMICS · FLASHCARDS
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QUESTION
Which component of GDP is directly affected by crowding out?
QUESTION
What happens to the economy's total investment during crowding out?
QUESTION
What is the impact of crowding out on foreign investment?
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ANSWER
Crowding out can attract foreign investment due to higher rates. Higher domestic rates draw capital from abroad.
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