The Term "Crowding Out" Refers to the Phenomenon That Occurs

Multiple Choice

The term "crowding out" refers to the phenomenon that occurs when increased government
Spending

A) raises the price level and reduces consumption.
B) leads to higher interest rates which reduces private investments.
C) leads to higher bond prices which decreases the demand for Treasury bonds.
D) leads to increased budget deficits that ultimately warrant increases in income taxes.