When government borrowing leads to higher interest rates, which can in turn reduce private investment, this...

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Question

When government borrowing leads to higher interest rates, which can in turn reduce private investment, this...

When government borrowing leads to higher interest rates, which can in turn reduce private investment, this is referred to as

	the indirect crowding-out
	the direct crowding-out
	open economy effect
	none of the above

business economics

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Answer 1

Answer #1

"B"

An increase in the interest rate that will reduce the private investment is called direct crowding out in the economy.

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Answer 2

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