Government contribution to a public good often results in less private contribution. What is this effect called?
A) Socialism effect.
B) Free-rider effect.
C) Wealth effect.
D) Crowding out effect.

Question

Quizplus · Accepted Answer

The crowding out effect occurs when government spending reduces the amount of private sector spending, including contributions to public goods, as individuals or organizations might feel their contributions are less necessary or opt to rely on government provision.

Government Contribution to a Public Good Often Results in Less