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The Following Is an Investment Schedule

Question 129

Multiple Choice

The following is an investment schedule. Investment spending is in billions of dollars. 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 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

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