The Term "Crowding Out" Refers to the Phenomenon That Occurs

question 127

Multiple Choice

The term "crowding out" refers to the phenomenon that occurs when increased government Jspending

• A) raises the price level and reduces consumption.
• B) leads to higher interest rates which reduces private investments.
• C) leads to higher bond prices which decreases the demand for Treasury bonds.
• D) leads to increased budget deficits that ultimately warrant increases in income taxes.