One side effect of expansionary fiscal policy is that
A)higher interest rates cause a change in the composition of GDP
B)higher interest rates significantly increase private saving
C)consumption spending is crowded out
D)the Fed has to reinforce the policy through open market sales
E)all of the above

Question

Quizplus · Accepted Answer

Expansionary fiscal policy can lead to higher interest rates, which may change the composition of GDP by crowding out private investment.

One Side Effect of Expansionary Fiscal Policy Is That