The following is an investment schedule. Investment spending is in billions of dollars.
Refer to the data in the table above. Assume that private investment spending is initially $78 billion. If the government finances a deficit and this action increases the interest rate by 2 percentage points, then the government financing would have potentially crowded out:
A) $92 billion of investment spending
B) $17 billion of investment spending
C) $78 billion of investment spending
D) $14 billion of investment spending
Correct Answer:
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