How does the private investment change

Reference no: EM13177120

In 2006, Congress estimated that the cost of the Iraq War was approximately $100 billion a year. Since the US gov't was running a budget deficit at the time, assume that the war was financed by gov't borrowing. How does the equilibrium interest rate and private investment change in response to gov't expenditure on the war?

Reference no: EM13177120

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