Crowding Out

Multiple Choice

Crowding out:

A) increases the multiplier effect, so that an increase in government spending raises income by more.
B) increases the multiplier effect, so that an increase in government spending raises income by less.
C) decreases the multiplier effect, so that an increase in government spending raises income by more.
D) decreases the multiplier effect, so that an increase in government spending raises income by less.