Explain how do governments borrow funds to finance

Reference no: EM1338172

Finance deficit spending

How do governments borrow funds to finance deficit spending? What is likely to happen to interest rates in the market? Assume flexible exchange rates, what is likely to happen to the exchange rate of the domestic currency? How are these related to crowding-out effect?

Reference no: EM1338172

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Explain how do governments borrow funds to finance : Explain how do governments borrow funds to finance deficit spending. What is likely to happen to interest rates in the market.

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