Crowding out effect is associated with:
Options
AIncrease in Private Investment
BDecrease in Private Investment due to high Public Expenditure
CIncrease in Exports
DDecrease in Imports
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Public FinancePYQ - May 2022 (Inter)Question 129 of 20
All Questions Correct Answer
✅ Option b — Decrease in Private Investment due to high Public Expenditure
All Options:
- AIncrease in Private Investment
- BDecrease in Private Investment due to high Public Expenditure
- CIncrease in Exports
- DDecrease in Imports
About This Chapter: Public Finance
Paper
Paper 4: Business Economics
Weightage
10%
Key Topics
Fiscal Policy, Budget, Market Failure
This chapter deals with government finances — how the government earns (taxation) and spends (expenditure) money. Key topics include Fiscal Policy, types of taxes (Direct and Indirect), the Union Budget, Public Debt, and the concept of Market Failure and how government intervention corrects it.
View Official ICAI SyllabusExam Strategy Tip
Focus on the difference between Revenue and Capital items in the budget. Understand Fiscal Deficit and its implications. Tax-related MCQs are commonly asked.
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