The large budget deficits of the U.S. government in the 2000s have not increased domestic interest rates because:
A)Americans increased their rate of saving.
B)businesses cut back on investment spending by an equal amount.
C)the value of the U.S. dollar rose.
D)foreigners were willing to buy the increased U.S. debt.

Question

Quizplus · Accepted Answer

Foreigners buying increased U.S. debt helps to keep domestic interest rates from rising, as it provides the necessary funding for the deficits without putting pressure on domestic savings to finance the deficit.

The Large Budget Deficits of the U