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Which of the following is an example of crowding-out?
a. The government invests in education, shifting the long-run aggregate supply curve to the right.
b. The government lowers taxes, but spending does not increase.
c. The government buys elementary students new school uniforms, which decreases the amount of private spending on school uniforms.
d. The government conducts countercyclical policy at the wrong time.
e. The government spends more than it collects in taxes.

Respuesta :

Answer:

c. The government buys elementary students new school uniforms, which decreases the amount of private spending on school uniforms.

Explanation:

Crowding - out -

It is the method which occurs when the government increases their involvement in the sector of the market economy , which affects the market remainder , in the demand side or in the supply side , is known as the process of crowding - out .

Same case is given in the option (c. ) , where the government buys the new school uniforms for the students in order to reduce the amount of private spending on the uniforms of the school .

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