Refer to the following graph to answer the next three questions. Interest rate $50 billion S 5% 4% D2 D₁ $125 $150 Savings, investment, government borrowing (billions of dollars) According to the graph, private investment of crowding-out. decreased by $50 billion O remained unchanged increased by only $25 billion decreased by $25 billion O increased by $50 billion as a result

ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter12: Federal Budgets And Public Policy
Section: Chapter Questions
Problem 3.6P
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Refer to the following graph to answer the next three questions.
Interest
rate
$50
billion
S
5%
4%
D2
D₁
$125 $150
government borrowing
(billions of dollars)
Savings, investment,
According to the graph, private investment
of crowding-out.
decreased by $50 billion
O remained unchanged
increased by only $25 billion
decreased by $25 billion
increased by $50 billion
as a result
Transcribed Image Text:Refer to the following graph to answer the next three questions. Interest rate $50 billion S 5% 4% D2 D₁ $125 $150 government borrowing (billions of dollars) Savings, investment, According to the graph, private investment of crowding-out. decreased by $50 billion O remained unchanged increased by only $25 billion decreased by $25 billion increased by $50 billion as a result
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