Consider the loanable funds model we analyzed in class. If there is an expected increase in future government spending, according to the PIH, A. Current real interest rates should rise. B. Current real interest rates should fall. C. Current investment should rise. D. Current investment should remain unchanged. E. both B and C

Consider the loanable funds model we analyzed in class. If there is an expected increase in future government spending, according to the PIH, A. Current real interest rates should rise. B. Current real interest rates should fall. C. Current investment should rise. D. Current investment should remain unchanged. E. both B and C

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Savings,investment And The Financial System

Section18.2: Saving And Investment In The National Income Accounts

Problem 2QQ

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