单选题 The crowding-out effect suggests that:
  • A. expansionary fiscal policy causes inflation.
  • B. restrictive fiscal policy is an effective weapon against inflation.
  • C. the sale of government bonds to the public will drive up interest rates, thereby retarding private investment and aggregate demand.
【正确答案】 C
【答案解析】The crowding-out effect refers to a reduction in private borrowing and spending as a result of higher interest rates generated by budget deficits that are financed by borrowing in the private loanable funds marker.