Economy : Fiscal Policy
Q 1 / 12
Which one of the following best describes the 'Crowding Out Effect' in the context of fiscal policy?
A
A situation where private investment increases due to increased Government spending
B
A situation where Government borrowing leads to higher interest rates, which reduces private investment
C
A situation where an increase in taxes leads to increased private sector investment
D
A situation where Government spending has no impact on aggregate demand