In the example with credit market imperfections in general equilibrium
A) An increase in government debt lowers the market interest rate.
B) An increase in government debt increases economic welfare for everyone.
C) An increase in government debt is a Pareto improvement.
D) An increase in government debt increases economic welfare for borrowers and reduces welfare for lenders.
E) An increase in government debt decreases economic welfare for everyone.
Correct Answer:
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