问题
单项选择题
The crowding-out effect suggests that:()
A. expansionary fiscal policy leads to inflation.
B. restrictive fiscal policy is an effective weapon against inflation.
C. greater government deficits will drive up interest rates, thereby reducing private investment.
答案
参考答案:C
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 market.