If the federal government is willing to pay whatever is necessary to borrow loanable funds, but the private sector is not, this reflects

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Quizplus · Accepted Answer

The situation described reflects the crowding-out effect. This occurs when government borrowing increases the demand for loanable funds, leading to higher interest rates and crowding out private investment. In this case, the private sector is not willing to pay the higher interest rates, indicating that they have been crowded out of the market by the government's borrowing.

If the Federal Government Is Willing to Pay Whatever Is