question 15

0. increase the risk of government default risk. c. raise the interest rate. d. discourage investment and hence reduce growth e. All of the above. 15. In the years leading up to the global financial crisis (say, around 2005-06), the large U.S. federal government deficits have not led to high long-term interest rates (unlike in the 1980s) Which of the followings may not be a possible explanation? a. global saving glut (in excess of global investment). b. foreign exchange intervention by central banks in East Asia (i.e., purchases of US T- bonds) as part of their efforts to promote the exports via keeping their currencies undervalued (or at least preventing their currencies from appreciating). c. Saving surpluses of oil exporters, suchlas Saudi Arabia. d. strong stock market rebound. e. None of the above. 16. Some commentators have argued that the Fed is running a risk with inflation in the future as a result of the