'Crowding out' refers to a side-effect of fiscal rather than monetary policy because:
A)it is based on rising rather than falling interest rates.
B)it is based on falling rather than rising interest rates.
C)under monetary policy, private debt doesn't replace public debt.
D)under monetary policy, the dollar appreciates rather than depreciates.
E)monetary policy won't affect net exports.

Question

Quizplus · Accepted Answer

Crowding out doesn't occur through monetary policy because monetary policy focuses specifically on the interest rate (in other words,an expansionary monetary policy will lower interest rates,not raise them,as happens with an expansionary fiscal policy).

'Crowding Out' Refers to a Side-Effect of Fiscal Rather Than