Multiple Choice
Assume the government incurs a budget deficit which is financed by borrowing.As a result, interest rates rise and the volume of private investment spending declines.This illustrates:
A) the equation-of-exchange effect.
B) the paradox of thrift.
C) the crowding-out effect.
D) the money-fund effect.
Correct Answer:
Verified
Correct Answer:
Verified
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