Scenario 2: The government increases deficit spending by $100 Billion dollars to invest in green energy throughout the country. 1. What effect will this have on the demand for loanable funds? 2. What effect will this change have on the interest rate? 3. How will this change the behavior of consumers?

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Q: Suppose the government borrows $20 million more next year than this year. a. Draw and fully label a…

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Q: Scenario 2: The government increases deficit spending by $100 Billion dollars to invest in green…

A: The given question has been solved below.

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Q: Suppose the government borrows $20 million more next year than this year. What happens to…

A: PLEASE FIND THE ANSWER BELOW.