Crowding out:
A) is the decrease in private spending that occurs when government spending increases.
B) occurs when people see that lower taxes today means higher taxes in the future,so they quickly spend the tax cut.
C) is federal government policy on taxes,spending,and borrowing that is designed to influence business fluctuations.
D) is central bank policy on the monetary base,interest rates,and bank reserves that is designed to influence business fluctuations.

Question

Quizplus · Accepted Answer

Crowding out refers to the situation where increased government spending reduces private spending, either because it competes for resources or because the government borrows money, which may increase interest rates and make borrowing more expensive for businesses and individuals. This can lead to a decrease in overall economic activity.

Crowding Out