If government increases expenditure without raising taxes

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Reference no: EM131112337

If government increases expenditure without raising taxes, this will:

a) increase the budget deficit and require the government to borrow additional funds

b) cause the interest rate to increase, thereby, reducing private investment and crowding out the private sector

c) cause a decrease in the domestic exchange rate which will increase exports and decrease imports

d) all of the above

e) A and B only

Reference no: EM131112337

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