Excess government subsidies distorting resource allocation
Excess private expenditure producing inflation
Market exploitation by the private sector due to reckless government expenditure.
Excess government expenditure, raising interest rate and depressing the availability of funds.
Answer is (d)
Crowding out effect means high level of government expenditure causes high government borrowings (because of high fiscal deficit). The high government borrowings will reduce (crowd out) private investment because the money to be used by the private will be gone to the government.
The cut -off yield is the interest rate that should be given by the government to the bond holders as per the bond auction. It is the interest rate for the last bundle auction. Hence it shows the interest cost of the government.
Suppose that we a purchased an asset sometime back. Now we are going to sell it and find that is value has increased. This situation is an increase in the value of the asset or capital gains for the asset. Here, we have to pay a capital gains tax.