Multiple Choice
Which of the following is an example of crowding out?
A) An increase in government spending increases interest rates, causing investment to fall.
B) A decrease in private savings increases interest rates, causing investment to fall.
C) A decrease in the money supply increases interest rates, causing investment to fall.
D) An increase in taxes increases interest rates, causing investment to fall.
Correct Answer:
Verified
Correct Answer:
Verified
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