A Crowding-In Effect Occurs

question 134

Multiple Choice

A crowding-in effect occurs

• A)When an increase in government spending leads to an increase in savings.
• B)When increased government borrowing reduces the quantity of funds that businesses can borrow.
• C)That increases investment each time government spending increases.
• D)When the increase in GDP caused by the increased government spending makes businesses see more investment projects as profitable.

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