There is $10 trillion in the loanable funds market.  $6 trillion in private borrowing and $4 trillion in government borrowing.  The federal government increases its borrowing to $5 trillion, crowding out $1 trillion in private borrowing.  Interest rates remain the same.  Give an argument why we should care about the crowding out

MACROECONOMICS FOR TODAY
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Chapter13: Federal Deficits, Surpluses, And The National Debt
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There is $10 trillion in the loanable funds market.  $6 trillion in private borrowing and $4 trillion in government borrowing.  The federal government increases its borrowing to $5 trillion, crowding out $1 trillion in private borrowing.  Interest rates remain the same.  Give an argument why we should care about the crowding out

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