Suppose Indian government borrows 50,000/- more next year than this year. Use a supply-and-demand diagram to analyze this policy. Does the interest rate rise or fall? What happens to investment? To private saving? To public saving? To national saving? Compare the size of the changes to the 50,000/- of extra government borrowing.

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Chapter8: Savings,investment And The Financial System
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Suppose Indian government borrows 50,000/- more next year than this year.

Use a supply-and-demand diagram to analyze this policy. Does the interest rate rise or fall?

What happens to investment? To private saving? To public saving? To national saving? Compare the size of the changes to the 50,000/- of extra government borrowing.

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