In a closed economy with fixed output, an increase in government spending without any change in taxes will lead to a(n):
A. increase in the real interest rate and a decrease in private saving.
B. decrease in the real interest rate and an increase in private saving.
C. decrease in the real interest rate and no change in private saving.
D. increase in the real interest rate and no change in private saving.
Ans: D. increase in the real interest rate and no change in private saving.
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