A. Refinancing of the public debt might drive up real interest rates because bonds have higher interest rates than other assets. borrowing rates are higher than lending rates. the Treasury charges the government more than the private sector. government borrowing to finance the debt increases demand for funds and competes with private borrowing. b. Refinancing of the public debt might cause higher interest rates, which can lower investment and economic growth. lower interest rates, which can lower investment and economic growth. higher interest rates, which can raise investment and economic growth. lower interest rates, which can raise investment and economic growth. c. If public investment financed through borrowing complements private investment, there will be less public borrowing needed and less pressure on interest rates. private borrowers may be willing to pay higher interest rates associated with financing the public debt. there will be lower prices than otherwise would occur. private borrowers will be more resistant to paying higher interest rates associated with financing the public debt.