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What do you understand by public crowding out of private sector investments?

April 26, 2017Crowding investments private public sector understand

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What do you understand by public crowding out of private sector investments?

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When goverment gets the deficit generated due to govt spending by borrowing money from the open market ; creating an increase in interest rate ; which eventually demotivates investments in the privates sector it is called public crowding out of private sector investment.