问题
单项选择题
The term "crowding out" implies that:（）
A. Fed purchases of securities cause inflation in the long run.
B. A budget surplus will be a highly effective weapon against inflation.
C. budget deficits will increase real interest rates and thereby retard business investment.
答案
参考答案：C
解析：
Under this theory, increased government borrowing increases interest rates which causes businesses to undertake less investment as some projects no longer have positive NPVs.