time lag 33. If an increase in government spending causes an increase in government borrowing, this could induce/cause: (a) An increase in interest rates, which would cause private domestic investment to fall. (b) An increase in interest rates, which would cause private domestic investment to rise. (c) An increase in interest rates but no effect on private domestic investment. (d) A decrease in interest rates, which would cause private domestic investment to rise.

time lag 33. If an increase in government spending causes an increase in government borrowing, this could induce/cause: (a) An increase in interest rates, which would cause private domestic investment to fall. (b) An increase in interest rates, which would cause private domestic investment to rise. (c) An increase in interest rates but no effect on private domestic investment. (d) A decrease in interest rates, which would cause private domestic investment to rise.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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