Government deficit spending occurs when a government spends more money than it collects in revenue during a specific period. It leads to budget deficits and increases the national debt.
National debt: The national debt represents the cumulative amount of money owed by a government due to past deficits.
Fiscal policy: Fiscal policy refers to how governments use taxation and government spending to influence the overall economy.
Crowding out effect: The crowding out effect occurs when increased government borrowing leads to higher interest rates and reduces private sector investment.
AP Macroeconomics - 5.3 Money Growth and Inflation
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