Suppose the government can borrow funds in large global capital markets. This means that a.all of them b.as long as the deficit is not “too large” the government can borrow without crowding out private investment. c.too much borrowing that results in foreigners halting their lending to the government could lead to a sudden spike in domestic interest rates. d.interest rates are lower in the domestic market than otherwise.

Suppose the government can borrow funds in large global capital markets. This means that a.all of them b.as long as the deficit is not “too large” the government can borrow without crowding out private investment. c.too much borrowing that results in foreigners halting their lending to the government could lead to a sudden spike in domestic interest rates. d.interest rates are lower in the domestic market than otherwise.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter31: The Impacts Of Government Borrowing

Section: Chapter Questions

Problem 3SCQ: In the late 1990s, the U.S. government moved from a budget deficit to a budget surplus and the trade...

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