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Business, 15.04.2020 02:25 tbair5417

Suppose that the government increases spending without changing its taxes in an effort to shift the aggregate demand curve to the right, thereby increasing real GDP. To the extent that increased government borrowing causes interest rates to rise, the increase in aggregate demand will be less than policymakers expected when formulating the magnitude of their fiscal stimulus. The situation described above is known as the crowding-in effect. Is this statement true or false

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