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Question: Does government borrowing crowd out private spending?  Suppose a hypothetical economy Is operatin...

Show transcribed image text Does government borrowing crowd out private spending? Suppose a hypothetical economy Is operating at an output level that is well below full employment. In an attempt to increase aggregate demand, the government borrows money in order to increase spending. According to Keynesian economists, how are each of the following items affected by the increase in government spending and borrowing?

Does government borrowing crowd out private spending? Suppose a hypothetical economy Is operating at an output level that is well below full employment. In an attempt to increase aggregate demand, the government borrows money in order to increase spending. According to Keynesian economists, how are each of the following items affected by the increase in government spending and borrowing?