Refer to the graph given below. Assume that the investment demand curve of an economy is I_d1 in period 1.The crowding-out effect of a large government deficit would be shown as a(n): A)shift of the investment demand curve from I_d1 to I_d2. B)leftward shift of the investment demand curve. C)increase in the interest rate from 4 percent to 6 percent and a decline in investment spending of $5 billion. D)increase in the interest rate from 6 percent to 8 percent and a decline in investment spending of $40 billion.

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The Answer of Refer to the graph given below. Assume that the investment demand curve of an economy is I_d1 in period 1.The crowding-out effect of a large government deficit would be shown as a(n): A)shift of the investment demand curve from I_d1 to I_d2. B)leftward shift of the investment demand curve. C)increase in the interest rate from 4 percent to 6 percent and a decline in investment spending of $5 billion. D)increase in the interest rate from 6 percent to 8 percent and a decline in investment spending of $40 billion.

Refer to the Graph Given Below