An increase in government borrowing increases the demand for loanable funds.

Name: An increase in government borrowing increases the demand for loanable funds.
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When the government borrows more money, it increases the demand for loanable funds in the market. This happens because the government is competing with other borrowers, such as businesses and individuals, for the same pool of savings. As a result, interest rates would increase, as lenders are able to charge higher rates due to increased demand.

An Increase in Government Borrowing Increases the Demand for Loanable