The government of Burginville currently has a balanced budget. Rampant consumer spending in Burginville has led to a decrease in national savings, which has affected real interest rates in Burginville.
Which action could the government of Burginville take to offset the effect of a decrease in national savings on real interest rates?
Choose 1 answer:
(A) Increase the money supply.
B Decrease the money supply.
(c) Run a budget deficit.
(D) Increase government spending.
(E) Run a budget surplus.
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