Crowding Out Is Associated With

question 112

Multiple Choice

Crowding out is associated with:

• A)a reduction in business investment resulting from an increase in government borrowing and higher interest rates.
• B)an increase in business investment resulting from an increase in government borrowing and higher interest rates.
• C)an increase in private savings caused by higher future tax liabilities when government increases borrowing.
• D)a decrease in government spending caused by a shortage of available credit.