Essay
An earlier chapter discussed the issue of crowding out.Crowding out refers to the idea that a budget deficit will add government borrowing to other demands for loans,driving up the interest rate,which will reduce private investment.How do international considerations (the possibility that the debt is purchased by foreigners)affect this issue? Is it possible to internationalize the debt? Does that mean that crowding out is not a problem in this case?
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Crowding out occurs when financing the d...View Answer
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