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Which Cause-And-Effect Chain Would Best Explain the Reason for a Crowding-Out

Question 42

Multiple Choice

Which cause-and-effect chain would best explain the reason for a crowding-out effect? An expansionary fiscal policy:


A) increases interest rates that decrease private investment spending.
B) decreases interest rates that increase private investment spending.
C) increases interest rates that increase private investment spending.
D) decreases interest rates that decrease private investment spending.

Correct Answer:

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