What is the crowding-out effect?
the loss of funds for private investment due to government borrowing
a situation in which the government spends more than it takes in
all the money the federal government owes to bondholders
a situation in which the government takes in more than it spends

option C  

"the loss of funds for private investment due to government borrowing"

Explanation:

The crowding out effect is an economic theory which supports that rising public sector spending leads to a reduction of private sector spending or even eliminates it. When the government increases its borrowing, meaning expansionary fiscal policy, it rises the real interest rate as well, which has the effect of captivating the economy's lending capacity and of discouraging businesses from making capital investments.