(i) Using IS/LM diagram explain the likely effects of a fiscal expansion financed by government borrowing on both the domestic interest rate and the level of economic activity. (ii) Briefly explain what the national debt is and why keeping the national debt down as a nercentage of GDP can be a good thing.

(i) Using IS/LM diagram explain the likely effects of a fiscal expansion financed by government borrowing on both the domestic interest rate and the level of economic activity. (ii) Briefly explain what the national debt is and why keeping the national debt down as a nercentage of GDP can be a good thing.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter31: The Impacts Of Government Borrowing

Section: Chapter Questions

Problem 18CTQ: The U.S. government has shut down a number of times In recent history Explain how a government...

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