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According to the Traditional View of Deficit Financing,an Increase in Debt-Financed

Question 71

Multiple Choice

According to the traditional view of deficit financing,an increase in debt-financed government expenditure


A) causes interest rates to rise,private investment to fall,net exports to fall,and an inflow of foreign capital.
B) causes interest rates to rise,private investment to fall,net exports to fall,and an outflow of domestic capital.
C) causes interest rates to fall,private investment to rise,net exports to increase,and an inflow of foreign capital.
D) causes interest rates to rise,private investment to fall,net exports to fall,and an outflow of domestic capital

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