September 8, 2026

UPSC Prelims 2026 Q94 — Crowding Out EffectUPSC प्रीलिम्स 2026 प्रश्न 94 — Crowding Out Effect

About 1 min readPublished 8 September 2026

UPSC • Prelims • 2026 • Prelims GS Paper I Attempt the actual previous-year questions first. Official answer, analysis and elimination clue appear only after final submission.

Official Provisional Answer Key — 27 May 2026 1 questions Official Question Paper ↗ Official Answer Key ↗

Question 94

UPSCEconomy2026Prelims GS Paper ISeries A

Subject / विषय: Economy

Which one of the following best describes the 'Crowding Out Effect' in the context of fiscal policy?

राजकोषीय नीति के संदर्भ में 'Crowding Out Effect' को निम्नलिखित में से कौन सबसे अच्छी तरह व्यक्त करता है?

A. A situation where private investment increases due to increased Government spendingसरकारी व्यय बढ़ने के कारण निजी निवेश बढ़ जाता हैB. A situation where Government borrowing leads to higher interest rates, which reduces private investmentसरकारी उधारी से ब्याज दरें बढ़ती हैं, जिससे निजी निवेश घटता हैC. A situation where an increase in taxes leads to reduced private investmentकरों में वृद्धि से निजी निवेश घटता हैD. A situation where Government spending has no impact on aggregate demandसरकारी व्यय का aggregate demand पर कोई प्रभाव नहीं पड़ता

Official Provisional Answer Key — 27 May 2026

Question 1 of 1

Author / EditorGoldej Kumar

Goldej Kumar is the Founder and Editor of Sri Ram Exams (Exam2.in), an independent educational platform for UPSC, State Public Service Commission, SSC and other competitive examinations. His editorial focus is on exam-relevant current affairs, source-based analysis, MCQ reasoning, previous-year-question patterns and clear bilingual learning for English- and Hindi-medium aspirants.

UPSC Prelims 2026 Q94 — Crowding Out EffectUPSC प्रीलिम्स 2026 प्रश्न 94 — Crowding Out Effect

Which one of the following best describes the 'Crowding Out Effect' in the context of fiscal policy?

राजकोषीय नीति के संदर्भ में 'Crowding Out Effect' को निम्नलिखित में से कौन सबसे अच्छी तरह व्यक्त करता है?

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