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Suppose that the federal budget deficit decreases. Part 2 The decrease in government borrowing will cause interest rates to fall rise . In an open
Suppose that the federal budget deficit decreases. Part 2 The decrease in government borrowing will cause interest rates to fall rise . In an open economy, this will make U.S. bonds less attractive more attractive to overseas residents, who will buy less more bonds and more less U.S. exports, and thus the trade deficit will fall rise
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