APFIVE Unintended Consequences of Deficit Spending
What might be an unintended consequence of large‐scale government deficit spending in an expansionary fiscal policy?
A
Crowding out of private investment due to increased demand for loanable funds.
B
A consistent decline in inflationary pressures because of balanced budgets.
C
An immediate and sustained decrease in unemployment with no adverse side effects.
D
A reduction in the overall money supply as a result of decreased government spending.
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