Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 11 of 11
The crowding-out effect suggests that government borrowing to finance higher expenditures will most likely increase ______.
B. the real interest rate
C. the supply of loanable funds
A. private investment
B. the real interest rate
C. the supply of loanable funds
User Contributed Comments 3
| User | Comment |
|---|---|
| bravoshieh | Any idea why there is a decrease in the supply of loanable funds? Thought an increase in the real interest rate only drives the supply up? |
| Antoinepo | increase in interest rate comes from the lack of loanable funds |
| Antoinepo | lack of loanable funds comes from the government excessive borrowing |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
explain the implementation of fiscal policy and difficulties of implementation as well as whether a fiscal policy is expansionary or contractionary
CFA® 2025 Level I Curriculum, Volume 1, Module 3.