With the introduction of government-funded health programs for the elderly and the poor, private health insurers have lost a substantial portion of their insured clients to these programs. The introduction of government-sponsored spending that curbs private investment is referred to as:
A)Squeezing-out
B)Crowding-in
C)Crowding-out
D)Squeezing-in

Question

Quizplus · Accepted Answer

The introduction of government-sponsored spending that curbs private investment is referred to as crowding-out.
Key Takeaway: Crowding-out occurs when government-sponsored investment in programs leads to a curb or a reduction in private investment. This is shown in health programs, for example, for the elderly and the poor. Private insurance companies essentially find themselves losing clients to the government programs.

With the Introduction of Government-Funded Health Programs for the Elderly