Fill in the Blank Question

Question

Fill in the blank question.
When the government borrows money and the money supply is held constant, overall demand for money increases, as does the interest . Some private investment business may be choked off, which is an example of the crowding-out effect.

Answer 1

When the government borrows money and the money supply is held constant, overall demand for money increases, as does the interest rate. Some private investment business may be choked off, which is an example of the crowding-out effect.