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Government Borrowing Will Not Crowd Out Private Investment Spending If

Question 1

Multiple Choice

Government borrowing will not crowd out private investment spending if unemployment is _____ and the fiscal expansion causes a(n) _____ in incomes and a(n) _____ in saving at each interest rate.


A) high; increase; increase
B) high; increase; decrease
C) low; increase; decrease
D) low; decrease; decrease

Correct Answer:

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