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An Increase in Government Spending That Is NOT Financed by an Increase

Question 121

Multiple Choice

An increase in government spending that is NOT financed by an increase in taxes will cause which of the following?


A) an increase in interest rates and an increase in planned investment
B) an increase in interest rates and a reduction in planned investment
C) a reduction in interest rates and an increase in planned investment
D) a reduction in interest rates and a reduction in planned investment

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