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nadezda [96]
3 years ago
14

A decrease in government spending

Business
1 answer:
stich3 [128]3 years ago
5 0

Answer:

a. decreases the interest rate and so investment spending increases.

Explanation:

An increase in government spending has a crowd-out effect on the economy as interest rate rises since government borrows more than many businesses in terms of size and volume. The opposite effect results when government spending decreases.

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