Compare the impact of an increase in the government's budget deficit on investment spending in a small open economy versus in a comparable closed economy. Assume that prices are flexible and that factors of production are fully employed in both economies. Assume that there is perfect capital mobility for the small open economy.

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The Answer of Compare the impact of an increase in the government's budget deficit on investment spending in a small open economy versus in a comparable closed economy. Assume that prices are flexible and that factors of production are fully employed in both economies. Assume that there is perfect capital mobility for the small open economy.

Compare the Impact of an Increase in the Government's Budget