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A business will want to borrow to undertake an investment project when the rate of return on that project is: O a. lower than the interest rate. O b, higher can the interest rate. O c. higher than the exchange rate. O d. equal to the inflation rate. QUESTION 18 Crowding out is a phenomenon: a. in which an increase in the government's budget surplus decreases overall investment spending O b. where overproduction in the goods market leads to a sharp drop in the aggregate price level. O c. where an increase in the government's budget deficit causes overall investment spending to fall. O d. where an increase in imports causes the overall domestic production to fall. QUESTION 19 If interest rates in the loanable funds market are above the market equilibrium there will be a of loanable funds and interest rates will O a, shortage, fall O b. surplus; rise O c. shortage, rise O d. surplus; fall