Crowding Out With Inelastic Supply
If the supply of loanable funds is highly inelastic, which of the following will be the primary result of a substantial increase in government borrowing?
A
Lower interest rates with expanded total investment
B
Minimal crowding out with small interest rate changes
C
Increased private investment despite higher interest rates
D
Severe crowding out with large interest rate increases
Question Leaderboard
Not enough data yet to show leaderboard.