Under what condition would crowding out not inhibit long-run economic growth? Under what condition would crowding out impede long-run economic growth?

Economic growth :

Economic growth is the increase or development in the production and distribution of goods and services in a given economy over time. The increased value of a market product as a result of economic inflationary adjustments characterizes economic growth. The percentage increase in the gross domestic product is used to quantify or assess growth (GDP).

The decline in economic activity associated with deficit-financed spending is referred to as "crowding out" by economists. Government expenditure produces less economic growth as a result of crowding out, which must be balanced against any good effects of government spending. Increased government spending would not stifle long-term growth if it were used to compensate for a lack of private investment during a recession, because the lack of demand for investment would avoid crowding out.

Crowding out would stifle long-term growth if increasing government spending continues past the point of potential output or occurs when private investment demand is high.