Crowding-out results from
A)an increase in the supply of money and a decrease in the velocity of money.
B)a decrease in the supply of money and an increase in the velocity of money.
C)the inverse relationship between the supply of money and nominal GDP.
D)deficit financing that increases interest rates and reduces investment.

Question

Quizplus · Accepted Answer

Crowding-out occurs when government deficit financing leads to higher interest rates, which in turn reduces private investment.

Crowding-Out Results from