Fill in the blanks to make the following statements correct. a. In a closed economy, when the
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Fill in the blanks to make the following statements correct.
a. In a closed economy, when the government borrows to finance the deficit, interest rates will ___________ and some private investment will be ___________.
b. In an open economy, when the government borrows to finance the deficit, interest rates will _________ the Canadian dollar will _________ and net exports will __________
c. Suppose a law was passed that required the government to balance its budget each year. Fiscal policy would then have a(n) _________ effect.
d. A cyclically balanced budget is difficult to implement because it is difficult to identify the ___________.
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