Crowding out is least likely to occur when deficit government spending is financed through
A) taxation.
B) reductions in consumption.
C) monetary expansion.
D) reductions in investment.

Question

Quizplus · Accepted Answer

Monetary expansion increases the money supply, which can offset the potential increase in interest rates caused by deficit spending, thus reducing the likelihood of crowding out.

Crowding Out Is Least Likely to Occur When Deficit Government