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The Crowding Out of Net Exports Resulting from Expansionary Fiscal

Question 69

Multiple Choice

The crowding out of net exports resulting from expansionary fiscal policy in the long run is due in part to


A) the tendency of some government spending to go toward imports.
B) the negative relationship between government purchases and interest rates in a full-employment economy.
C) the inflow of foreign capital that results from high interest rates.
D) the outflow of domestic capital that results from low interest rates.
E) none of the above.

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