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Why does the interest rate fall when government reduces it expenditures govt. purchas 3 Problem Overview Suppose the government reduces government expenditures by $50 billion.

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Why does the interest rate fall when government reduces it expenditures

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govt. purchas 3 Problem Overview Suppose the government reduces government expenditures by $50 billion. Use a supply-and-demand diagram to analyze the policy. Does the interest rate rise or fall? Fall What happens to investment, public saving, private saving, and national saving? Public saving a national saving private saving decrease Interest g= Y-T - C rate ent

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