2.Decide whether or not an increase in government spending financed by a budget deficit would increase (+), decrease (-), or have no effect (NE), on each of the following economic variables. (9 mks)

a.The real interest rate under the crowding out view.

b.The real interest rate under the new classical view.

c.Private borrowing for investment under the crowding out view

d.Personal saving under the new classical view

e.Foreign capital investment in the Cayman Islands under the crowding out view

f.CI net exports under the crowding out view

g.Aggregate demand under the Keynesian view

h.Aggregate demand under the crowding out view

i.Aggregate demand under the new classical view