The basic idea of crowding out is that a budget:
A)deficit will cause the interest rate to go down.
B)deficit will cause the interest rate to go up.
C)surplus will cause the interest rate to go down.
D)surplus will cause the interest rate to go up.

Question

Quizplus · Accepted Answer

The basic idea of crowding out is that when the government runs a budget deficit, it needs to borrow money, which can lead to higher interest rates as the government competes with the private sector for loanable funds.

The Basic Idea of Crowding Out Is That a Budget