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Use the following to answer questions: Use the following to answer questions:   -(Figure: Loanable Funds Market III) Use Figure: Loanable Funds Market III.If the government in a closed economy finances deficits by selling bonds and it decides to decrease defence spending by $200 billion,the equilibrium interest rate will: A)  rise to 18%. B)  not change. C)  fall to 13.5%. D)  fall to 12%.
-(Figure: Loanable Funds Market III) Use Figure: Loanable Funds Market III.If the government in a closed economy finances deficits by selling bonds and it decides to decrease defence spending by $200 billion,the equilibrium interest rate will:

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Definitions:

Special Project

A temporary endeavor with a specific goal and timeline, which may require resources outside of the company's normal work scope.

Relevant Cost

Expenses that are directly tied to a specific business decision, which may affect the outcome of that decision.

Discounted Price

The reduced price of an item after applying a discount, which lowers the selling price from its original level.

Scrap Value

The calculated resale value of an asset at the end of its period of serviceability.

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