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What economists refer to as crowding-out

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Reference no: EM132181597

Define and explain what economists refer to as "crowding-out." Use the following data to graphically illustrate what "crowding-out" looks like using the loanable funds market.  Explain your findings.

Before Stimulus

Government Borrowing = $ 0

Savings = $ 250

Investment = $ 250

Interest Rate = 5%

After Stimulus

Government Borrowing = $ 100

Savings = $ 300

Investment = $ 200

Interest Rate = 6%

Reference no: EM132181597

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