The Crowding Out Effect Is Caused by

Multiple Choice

The crowding out effect is caused by

A) an increase in the money supply, which increases the demand for goods and services, and thus crowds out investment.
B) an increase in government purchases, which reduces the demand for goods and services, and thus crowds out investment.
C) an increase in consumer income, which increases the demand for goods and services, and thus crowds out investment.
D) an increase in government purchases, which increases the demand for goods and services, and thus crowds out investment.