What the additional spending-borrowing funded

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Reference no: EM13239350

Consider the argument that government spending and borrowing harms long-run economic growth.

A. Is this most likely to happen if the private spending crowded out is consumption spending or investment spending? Briefly explain.

B. In terms of the impact on long-run economic growth, would it matter what the additional spending/borrowing funded? In other words, would it have a different impact on economic growth if the spending went to highways, weapons systems or parks?

Reference no: EM13239350

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