{"id":85096,"date":"2025-06-01T03:03:11","date_gmt":"2025-06-01T03:03:11","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=85096"},"modified":"2025-06-01T03:03:11","modified_gmt":"2025-06-01T03:03:11","slug":"the-increase-in-private-investment-spending-induced-by-the-increase-in","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/the-increase-in-private-investment-spending-induced-by-the-increase-in\/","title":{"rendered":"The increase in private investment spending induced by the increase in"},"content":{"rendered":"

The increase in private investment spending induced by the increase in Government spending is known as<\/p>\n

[amp_mcq option1=”Crowding in” option2=”Deficit financing” option3=”Crowding out” option4=”Pumping out” correct=”option1″]<\/p>\n

\n
\n
This question was previously asked in<\/div>\n
UPSC CDS-1 – 2021<\/div>\n<\/div>\n
Download PDF<\/a>Attempt Online<\/a><\/div>\n<\/div>\n
\nCrowding in refers to the phenomenon where increased government spending stimulates aggregate demand, leading to higher economic activity and improved business confidence. This positive economic environment can induce firms to increase their private investment spending.
\n<\/section>\n
\n– Crowding in occurs when fiscal expansion leads to an increase, rather than a decrease, in private investment.
\n– This typically happens when the economy has significant unused capacity or when government spending specifically targets infrastructure or research that complements private sector activities.
\n<\/section>\n
\nCrowding out is the opposite phenomenon, where increased government borrowing to finance spending raises interest rates, making it more expensive for private firms to borrow and invest, thus reducing private investment. Deficit financing is the method of funding government spending when revenue is insufficient, often through borrowing. Pumping out is not a standard economic term.
\n<\/section>\n","protected":false},"excerpt":{"rendered":"

The increase in private investment spending induced by the increase in Government spending is known as [amp_mcq option1=”Crowding in” option2=”Deficit financing” option3=”Crowding out” option4=”Pumping out” correct=”option1″] This question was previously asked in UPSC CDS-1 – 2021 Download PDFAttempt Online Crowding in refers to the phenomenon where increased government spending stimulates aggregate demand, leading to higher … <\/p>\n

Detailed SolutionThe increase in private investment spending induced by the increase in<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1087],"tags":[1110,1112],"class_list":["post-85096","post","type-post","status-publish","format-standard","hentry","category-upsc-cds-1","tag-1110","tag-economic-and-social-development","no-featured-image-padding"],"yoast_head":"\nThe increase in private investment spending induced by the increase in<\/title>\n<meta name=\"description\" content=\"Crowding in refers to the phenomenon where increased government spending stimulates aggregate demand, leading to higher economic activity and improved business confidence. This positive economic environment can induce firms to increase their private investment spending. - Crowding in occurs when fiscal expansion leads to an increase, rather than a decrease, in private investment. - This typically happens when the economy has significant unused capacity or when government spending specifically targets infrastructure or research that complements private sector activities.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/the-increase-in-private-investment-spending-induced-by-the-increase-in\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The increase in private investment spending induced by the increase in\" \/>\n<meta property=\"og:description\" content=\"Crowding in refers to the phenomenon where increased government spending stimulates aggregate demand, leading to higher economic activity and improved business confidence. This positive economic environment can induce firms to increase their private investment spending. - Crowding in occurs when fiscal expansion leads to an increase, rather than a decrease, in private investment. - This typically happens when the economy has significant unused capacity or when government spending specifically targets infrastructure or research that complements private sector activities.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/the-increase-in-private-investment-spending-induced-by-the-increase-in\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T03:03:11+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"The increase in private investment spending induced by the increase in","description":"Crowding in refers to the phenomenon where increased government spending stimulates aggregate demand, leading to higher economic activity and improved business confidence. 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