Ceteris paribus, which of the following is true about the concept of crowding out?
A. It increases the private sector's ability to raise the level of output.
B. It does not affect the private sector's ability to raise the level of output.
C. It reduces the private sector's ability to raise the level of output.
D. It occurs when spending increases are matched with tax increases.
Answer:C
Ceteris paribus, which of the following is true about the concept of crowding out?
A. It increases the private sector's ability to raise the level of output. B. It does not affect the private sector's ability to raise the level of output. C. It reduces the private sector's ability to raise the level of output. D. It occurs when spending increases are matched with tax increases.