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For Crowding Out to Occur in the Long Run, an Increase

Question 30

Multiple Choice

For crowding out to occur in the long run, an increase in government spending must cause the money demand curve to _______ in order to _______ the interest rate.


A) downwards; decrease
B) downwards; have no effect
C) upwards; increase
D) upwards; have no effect

Correct Answer:

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