The crowding out effect opposes expansionary fiscal policy because its argues that the rise of public sector spending will continue to reduce private sector spending.
Expansionary fiscal policy is an economic policy that prioritize increased government spending and reduced tax in order to increase aggregate demand in the economy.
Crowding out refers to when personal consumption and investments of business reduced because of increases in government spending
Therefore, the crowding out effect opposes expansionary fiscal policy because its argues that the rise of public sector spending will continue to reduce private sector spending.
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