The federal government has a large public debt that it finances through borrowing. As a result, real interest rates are higher than otherwise and the volume of private investment spending is lower. This illustrates the:
A. equation-of-exchange effect.
B. paradox of thrift.
C. crowding-out effect.
D. net export effect.
C. crowding-out effect.
Economics
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a. True b. False
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If banks choose not to lend out their excess reserves, the money supply will not expand
a. True b. False Indicate whether the statement is true or false
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