Refer to the above graph. The economy is initially at point 1. Which of the following events would cause a shift that would help offset the crowding-out effect? An increase in:
A) Interest rates caused by a change in Federal Reserve policy
B) Profit expectations resulting from an increase in government spending
C) Business taxes levied by government to pay for new government programs
D) The degree of excess capacity in business stemming from a recession
Correct Answer:
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