Which of the Following Best Explains What Is Meant by the Term

Multiple Choice

Which of the following best explains what is meant by the term crowding out?

A) An increase in government purchases causes interest rates to rise and results in a decline in investment expenditures.
B) An increase in government purchases causes interest rates to fall and results in a decline in investment expenditures.
C) An increase in investment causes interest rates to rise and results in a drop in government purchases.
D) Increases in consumption expenditures cause interest rates to rise and result in a decline in investment expenditures.
E) An increase in consumption expenditures causes interest rates to rise and results in a decline in government purchases.