I need an answer to all the questions, please.

According to the theory of "Crowding Out, government budget deficits are supposed to have effects in multiple markets. For each market, explain the expected effect of a government budget deficit in one or two sentences.

1. Labor market -- effect on wages, the effect on employment).
2. Goods market -- effect on prices (inflation).
3. Capital market -- effect on interest rates.

Consider the period 2008-2010:

What happened to the Government budget deficit during this time? (Why did the Government budget deficit change?)

According to the theory of crowding out, what should have happened to the main interest rate at which the government borrows (DGS10)? What did happen to this interest rate? Use the evidence to evaluate the theory of crowding out.

FREDW Federal Surplus or Deficit [-] as Percent of Gross Domestic Product 10-Year Treasury Constant Maturity Rate 10.0 7.5 5.0 -5.0 -7.5 -10.0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 1941 1960 Shaded areas indicate U.S. recessions Sources: Board of Governors, St. Louis Fed fred.stlouisfed.org FREDW Federal Surplus or Deficit [-] as Percent of Gross Domestic Product 10-Year Treasury Constant Maturity Rate 10.0 7.5 5.0 -5.0 -7.5 -10.0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 1941 1960 Shaded areas indicate U.S. recessions Sources: Board of Governors, St. Louis Fed fred.stlouisfed.org