Crowding out may occur because ________ fiscal policy usually involves the government ________ money.

If a country chooses to have a monetary policy oriented toward domestic goals and the freedom of international capital movements, then

A) it can have a fixed exchange rate. B) it cannot have a fixed exchange rate. C) it cannot balance its current account. D) it cannot have a fiscal policy oriented toward domestic goals. E) it cannot control money supply growth.

Low inflation is also better than _________ , which occurs with severe recessions.

a. hyperinflation b. hypoinflation c. deflation d. stagnation