Subject – Indian Economy
GS Paper – 3
Topic-
Fiscal Policy and Taxation system in India
Sub-Topic- Crowding out effect
Relevance – For Prelims as well as Mains
Question-1
Why
does an increase in public sector spending by the government decreases the
amount the private sector can spend?(150 words, 10 Marks)
Answer Hint
I.
Introduction
Write the name of the phenomena i.e. crowding out effect , along
with its meaning and diagram.
II.
Body
1.
Explain with
the help of graph explaining such economic situation as discussed in the
question
2.
Also ,
discuss its impact in short.
III.
Conclusion
What steps or measures should be taken in order to avoid such
situation ( write in short)
Click here to read and
learn more about the crowding-out effect.
NOTE- Refer Class notes of Prof. Sunny Kapoor Sir for better understanding
Answer uploaded on crowding effect
Attached PDF