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Explain how 'high government spending crowds out private spending'. ( 10 marks) Keynes proposed that consumption depends on current income. Briefly discuss three other determinants

  1. Explain how 'high government spending crowds out private spending'. ( 10 marks)
  2. Keynes proposed that consumption depends on current income. Briefly discuss three other determinants of consumption. (10 )
  3. Briefly discuss three policy rules for monetary policy that a central bank such as the Fed might follow. Why may these policy rules be superior to discretionary policy?

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