The Crowding-Out Effect Indicates That an Increase in a Fiscal

question 43

True/False

The crowding-out effect indicates that an increase in a fiscal deficit financed by borrowing will increase interest rates and thereby crowd out some domestic investment spending.

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Definitions:

Liquidated Debt

A debt or claim whose precise monetary value has been determined, acknowledged, or agreed upon by all involved parties.

Performance

The act of carrying out or accomplishing an action, task, or function.

Equitable Principles

Principles based on fairness, morality, and justice rather than strict rules of law.

Reliance Damages

Compensation awarded for losses suffered as a result of relying on a promise or contract that was not fulfilled.