Other things the same, an increase in the budget deficit A. shifts the supply of loanable funds left, so the interest rate rises. B. shifts the demand for loanable funds right, so the interest rate rises. C. shifts the demand for loanable funds left, so the interest rate falls. D. shifts the supply of loanable funds right, so the interest rate falls.
Other things the same, an increase in the budget deficit A. shifts the supply of loanable funds left, so the interest rate rises. B. shifts the demand for loanable funds right, so the interest rate rises. C. shifts the demand for loanable funds left, so the interest rate falls. D. shifts the supply of loanable funds right, so the interest rate falls.
Chapter21: Financial Markets, Saving, And Investment
Section: Chapter Questions
Problem 8P
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Question
Other things the same, an increase in the budget deficit
A. |
shifts the supply of loanable funds left, so the interest rate rises. |
|
B. |
shifts the demand for loanable funds right, so the interest rate rises. |
|
C. |
shifts the demand for loanable funds left, so the interest rate falls.
|
|
D. |
shifts the supply of loanable funds right, so the interest rate falls.
|
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