?

Macroeconomics

Free Version

Upgrade subject to access all content

Easy

Crowding Out in Loanable Funds Market

MACRO-9AABLN

When the government runs a larger budget deficit

A

the interest rate rises and private investment falls.

B

the interest rate rises and private investment rises.

C

the interest rate falls and private investment falls.

D

the interest rate falls and private investment rises.

E

the interest rate rises and private investment remains unchanged.