According to the Crowding-Out Effect, How Do the Interest Rate

question 97

Multiple Choice

According to the crowding-out effect, how do the interest rate and investment spending change when government spending increases?

• A) The interest rate and investment spending both increase.
• B) The interest rate increases and investment spending decreases.
• C) The interest rate decreases and investment spending increases.
• D) The interest rate and investment spending both decrease.

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