Refer to the above diagram.Initially assume that the investment demand curve is Id1.Which of the following effects of a budget deficit might shift the investment demand curve from Id1 to Id2, wholly offsetting any crowding-out effect?
A) an improvement in profit expectations by businesses
B) a decrease in saving
C) a decline in the interest rate
D) an increase in the marginal propensity to consume
Correct Answer:
Verified
Q84: Other things equal, the stock of capital
Q210: The "crowding-out effect" suggests that:
A)the economy's productive
Q211: Increased government spending for investments such as
Q212: Incurring an internal debt to finance a
Q213: The crowding-out effect of borrowing to finance
Q214: Which is an important problem associated with
Q216: Refer to the graph given below.
Q217: Payment of interest on the public debt
Q218: Q219: 
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