The answer is "In the classical view, there are ample loanable funds available at the current interest rate. When G increases, no crowding out occurs, interest rates do not rise, and aggregate expenditures rise by the full amount of G."
In the classical view, the capital market will find the balance between the demanded investment quality and the supplied savings one itself. However, in the Keynesian view, for example during a recession, government spending (G) will increase and there will be a competition to acquire available capital supply, that leads to the crowding out occurs and the general interest rate increases.
explore some of these tourist attractions
the metropolitan museum of art. source: anton_ivanov / shutterstock.
central park. source: gagliardiphotography / shutterstock.
national 9/11 memorial and museum.
empire state building.
statue of liberty.
the museum of modern art (moma)
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