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A Main Concern About the Crowding Out of Private Borrowing

Question 152

Multiple Choice

A main concern about the crowding out of private borrowing by increased federal government borrowing is:


A) the government may default on its loans.
B) increased federal government borrowing makes it difficult for foreign lenders to find borrowers in the U.S.
C) economic growth may be limited because businesses cannot afford to borrow to buy the machinery and equipment needed for growth.
D) Treasury securities issued by the government when it borrows are riskier than corporate bonds issued by businesses when they borrow.

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