Assume the government purposely incurs a budget deficit, Business Economics

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Assume the government purposely incurs a budget deficit

Assume the government purposely incurs a budget deficit that is financed by borrowing. As a result, interest rates rise and the amount of consumption spending declines. This illustrates: A. the equation-of-exchange effect. B. the paradox of thrift. C. the crowding-out effect. D. the wealth effect.

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Business Economics: Assume the government purposely incurs a budget deficit

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