Refer to the diagram. Initially assume that the investment demand curve is ID 1 . Which of the following effects of financing a large public debt might shift the investment demand curve from ID 1 to ID 2 , wholly offsetting any crowding-out effect?
A. An improvement in profit expectations by businesses.
B. A decrease in saving.
C. A decline in the interest rate.
D. An increase in the marginal propensity to consume.
A. An improvement in profit expectations by businesses.
Economics