In practice, increases in government spending in an open economy can crowd out

Name: In practice, increases in government spending in an open economy can crowd out
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Increases in government spending can lead to higher interest rates, which can reduce consumption by making loans more expensive, reduce investment by increasing the cost of borrowing for businesses, and reduce net exports by appreciating the domestic currency, making exports more expensive for foreign buyers.

In Practice, Increases in Government Spending in an Open Economy