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The Crowding-Out Effect Describes How a Government Budget

Question 192

Multiple Choice

The crowding-out effect describes how a government budget ________ ________ the real interest rate and thereby ________ equilibrium investment.

A) deficit; raises; decreases
B) deficit; lowers; increases
C) surplus; raises; decreases
D) surplus; lowers; decreases
E) deficit; lowers; decreases

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