The crowding out effect of expansionary fiscal policy refers to which of the following?
A) a reduction in private sector planned investment
B) a reduction in interest rates
C) the reduction in the size of the budget deficit
D) the reduction in the size of the inflationary gap

Question

Quizplus · Accepted Answer

The crowding out effect of expansionary fiscal policy refers to a reduction in private sector planned investment due to increased competition for resources and higher interest rates caused by government borrowing.

The Crowding Out Effect of Expansionary Fiscal Policy Refers to Which