Which of the Following Is an Example of Crowding Out

question 124

Multiple Choice

Which of the following is an example of crowding out?

• A) A decrease in the rate of growth of the stock of money decreases GDP.
• B) A deficit causes an increase in interest rates, which causes a decrease in investment spending.
• C) An increase in tariffs causes a decrease in imports.
• D) A decrease in government housing subsidies causes an increase in private spending on housing.

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