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How the federal reserve can offset the effects of budget

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Reference no: EM133574188

Question: Recall the concept of crowding out - a federal government budget deficit financed by borrowing causes interest rates to rise. Currently the US has a large budget deficit and yet interest rates are very low. Explain how the Federal Reserve can offset the effects of budget deficits on interest rates.

 

 

Reference no: EM133574188

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