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.