The Crowding-Out Effect Stresses That Increased Government Borrowing to Cover

Multiple Choice

The crowding-out effect stresses that increased government borrowing to cover a budget deficit will cause

A) a higher interest rate and depreciation of the U.S. dollar.
B) a higher interest rate and appreciation of the U.S. dollar.
C) a lower interest rate and depreciation of the U.S. dollar.
D) a lower interest rate and appreciation of the U.S. dollar.
E) no change in the interest rate and depreciation of the U.S. dollar.