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An Increase in Expected Real Interest Rates Would Probably Cause

Question 2

Multiple Choice

An increase in expected real interest rates would probably cause desired national saving to rise because


A) less must be saved to reach a given saving target.
B) the increased return makes saving more attractive.
C) the government would respond by increasing expenditures.
D) current interest rates would fall in response to higher expected real interest rates in the future.

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