What is the crowding out effect?and perhaps an example?

Crowding out effect, in economics, refers to reduction in
private domestic or  foreign investment due to increase in government spending. This is
due to many factors such as rise in interest rates and foreign exchange rates, which in
turn are fuelled by increased output and inflation.

The
implication of crowding out effects is that the effect of government spending to
stimulate economy in short-run by increasing in short run does not give the full benefit
as expected by the phenomenon of multiplier effect. However most of the economists
believe that in spite of crowding out effect, the net benefit of stimulus given by
government through deficit spending will be positive at least for 1 or 2
years.