Use the following to answer questions: 
-(Figure: The Market for Loanable Funds III) Use Figure: The Market for Loanable Funds III. If the government in a closed economy is running a budget balance of zero when it decides to increase defense spending by $200 billion and then finances the spending by selling bonds, the government will crowd out a maximum of _____ in private investment spending.
A) $200 billion
B) $100 billion
C) $50 billion
D) $10 billion
Correct Answer:
Verified
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