Answer Bank The government of Cantania stops borrowing from foreign nations Cantania's government increases its demand for financial capital Interest rates in Cantani rise More funds are made available for private investment in physical capital

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter15: Macroeconomic Policy, Economic Stability, And The Federal Debt
Section: Chapter Questions
Problem 9CQ
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The nation of Cantania regularly experiences changes in its national budget situation. In some years, Cantania operates with a budget deficit, while in other years it experiences a budget surplus. Please classify each of the possible consequences into the appropriate category of the budget circumstance most likely to cause them. answer bank in image

Cantania experiences an increase in budget surplus Cantania experiences an increase in budget deficit
   
Answer Bank
The government of Cantania stops borrowing from foreign nations
Cantania's government increases its demand for financial capital
Interest rates in Cantani rise
More funds are made available for private investment in physical capital
Transcribed Image Text:Answer Bank The government of Cantania stops borrowing from foreign nations Cantania's government increases its demand for financial capital Interest rates in Cantani rise More funds are made available for private investment in physical capital
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