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.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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.
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