Crowding out refers to a(n)
A) decrease in the amount of goods produced after too many goods have crowded onto the market
B) business tactic used to steal a competitor's customers
C) increase in one sector's spending caused by an increase in another sector's spending
D) decrease in the price level after too many goods have crowded onto the market
E) decline in one sector's spending caused by an increase in another sector's spending

Question

Quizplus · Accepted Answer

Crowding out refers to a situation where an increase in government spending causes a decrease in private sector spending, possibly due to higher interest rates or decreased availability of funds. This can occur because government borrowing may reduce the amount of funds available for private investment.

Crowding Out Refers to A(n)