Author Question: Crowding out refers to federal government deficits financed by: a. borrowing which increases ... (Read 18 times)

ENagel · **on:** Jun 30, 2018

Crowding out refers to federal government deficits financed by:
a. borrowing which increases interest rates and thereby reduces private spending.
b. increasing taxes which reduces private spending.
c. the federal government buying foreign debt which reduces the amount of government spending and government programs.
d. reducing government spending which reduces interest rates.

Question 2

Which of the following does not result in a change in the demand for foreign currency?
a. c and d.
b. changes in income.
c. changes in foreign currency supply.
d. changes in the foreign exchange rate.
e. changes in the interest rate.