# An increase in the government budget deficit ? with Answer - Economics Mcqs | TestPrep

> Solved MCQ: An increase in the government budget deficit ? Correct Answer: D. Increases the real interest rate and crowds out investment. Verified answer explanation for FPSC, PPSC, MDCAT, NTS, and CSS competitive exam preparation.

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# An increase in the government budget deficit ?

Direct Answer & Quick Reference

The correct option is **D. Increases the real interest rate and crowds out investment**.

A. has no impact on the real interest rate and fails to crowed out investment

B. decreases the real interest rate and crowds out investment

C. None of these answers

D. Increases the real interest rate and crowds out investment **(Correct Answer)**

✨ Explain with AI

Verified Key: D. Increases the real interest rate and crowds out investment
Solved by 5,496+ students

Verified against official examination board answer keys and standard curriculum textbooks.

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*Source: https://test-prep.blog/mcq/an-increase-in-the-government-budget-deficit-9e3c9641-6f6e-4f9d-a96c-58ab3608e050*
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