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Posted by on Sunday, September 27, 2009 at 11:50am.

What does crowding-out effect in a closed economy mean in simple terms?

So...if there is 0 crowding-out effect, does it means that the investment/savings stays the same? Actually... I don't see how savings is directly affected by this effect... By the way, does this effect only occur in a fiscal policy?

Thanks in advance.

  • More to the question.... - , Sunday, September 27, 2009 at 11:51am

    Can you please explain using an example?

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