Crowding Out Can Best Be Defined as

question 29

Multiple Choice

Crowding out can best be defined as

• A)higher interest rates caused by restrictive monetary policy, which reduces investment.
• B)higher interest rates caused by restrictive monetary policy, which increases saving and reduces consumption spending.
• C)government budget deficits causing a drop in private borrowing because of higher interest rates.
• D)government budget deficits causing a drop in interest rates, which reduces private saving.