The Crowding-Out Effect Refers to Which of the Following

Multiple Choice

The crowding-out effect refers to which of the following?

A) reductions in aggregate demand that occur as the government enacts a fiscal policy that is intended to eliminate an inflationary gap
B) price increases that result in less purchasing power for consumers
C) increases in consumption spending that leave fewer resources available for the economy to use to create capital
D) reductions in private investment spending that offset increases in other spending