Question

Suppose the federal government increases spending without also increasing taxes In a closed economy' setting this policy will (1) - short run. - real GDP and (2) — - the price level in the In an open economy setting, the effect of government fiscal policies will (3) - . For example, in an open economy, expansionary fiscal policies affect interest rates and also exchange rates in the same direction and the changes in the latter create a (4) - crowding out effect 1: Define Closed economy An economy that has no interactions in trade or finance with other countries. 2: Define Open economy An economy that has interactions in trade or finance with other countries. (1) reduce increase not affect (2) not affect O raise Olower (3) remain intact be dampened be amplified (4) similar smaller larger

Answer 1

Answer:

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Explanation: