Use the following to answer questions :
Figure: The Market for Loanable Funds III 
-(Figure: The Market for Loanable Funds III) Look at the figure The Market for Loanable Funds III. If the government in a closed economy finances deficits by selling bonds and it decides to decrease defense spending by $200 billion, the decrease in government spending will encourage _____ in additional private investment spending.
A) $400 billion
B) $200 billion
C) $100 billion
D) $10 billion
Correct Answer:
Verified
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