Crowding out of private investment by government implies 1 Higher borrowing by privat...........

Economic Affairs Public Finance and Debt Management

Crowding out of private investment by government implies:

1. Higher borrowing by private sector that reduces the size of government borrowing.

2. Higher borrowing by government sector that reduces the size of private borrowing.

3. Deficit financing by auctioning T-Bills by RBI causes crowding out of private investment.

Select the correct code:

1 only

2 and 3 only

1 and 3 only

None of the above

1st and 2nd statements are contradictory.
1st is incorrect i.e. Higher borrowing by private sector that reduces the size of government borrowing.

Submit Error