Crowding out refers to a diminishment of the output gain from fiscal stimulus due to
A) a lower money supply.
B) higher interest rates.
C) higher price level.
D) all of the above.

Name: Crowding out refers to a diminishment of the output gain from fiscal stimulus due to A) a lower money supply. B) higher interest rates. C) higher price level. D) all of the above.
Brand: Quizplus
Rating: 5.0 (37 reviews)

Question

Quizplus · Accepted Answer

Crowding out occurs when increased government spending leads to higher interest rates, which then reduces private investment.

Crowding Out Refers to a Diminishment of the Output Gain