Adjust the graph to show how a $25.8 billion dollar increase n the government's budget deficit affects the hypothetical oanable funds market below, holding all else equal. Market for Loanable Funds Select the answer that describes the adjustment in the loanable funds market. O The deficit decreases the demand for loanable funds and shifts the demand curve to the left; decreasing the interest rate and crowding out investment spending. O The deficit decreases national savings and shifts the supply curve to the left; increasing the interest rate and crowding out investment spending. O The deficit increases the demand for loanable funds and D shifts the demand curve to the right; increasing the Interest rate
Adjust the graph to show how a $25.8 billion dollar increase n the government's budget deficit affects the hypothetical oanable funds market below, holding all else equal. Market for Loanable Funds Select the answer that describes the adjustment in the loanable funds market. O The deficit decreases the demand for loanable funds and shifts the demand curve to the left; decreasing the interest rate and crowding out investment spending. O The deficit decreases national savings and shifts the supply curve to the left; increasing the interest rate and crowding out investment spending. O The deficit increases the demand for loanable funds and D shifts the demand curve to the right; increasing the Interest rate
Chapter21: Financial Markets, Saving, And Investment
Section: Chapter Questions
Problem 9P
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