In the presence of the crowding out effect, the purchase of Treasury bonds by the government will result in:
A)an increase in the interest rates.
B)a decrease in the price of bonds.
C)a decline in the private sector spending.
D)an increase in the private sector spending.
E)a decrease in the rate of inflation.

Question

Quizplus · Accepted Answer

The Answer of In the presence of the crowding out effect, the purchase of Treasury bonds by the government will result in:
A)an increase in the interest rates.
B)a decrease in the price of bonds.
C)a decline in the private sector spending.
D)an increase in the private sector spending.
E)a decrease in the rate of inflation.

In the Presence of the Crowding Out Effect, the Purchase