In 2007, Singaporeʹs government ran a budget surplus of $4.5 billion. The budget surplus
Loanable funds and the real interest rate.

Question

Quizplus · Accepted Answer

A budget surplus means that the government is spending less than it is collecting in revenue. This increases the supply of loanable funds available in the economy, as the government is not borrowing as much. With an increase in supply, the real interest rate is lowered. Therefore, the correct answer is D) increased the supply of; lowered.

In 2007, Singaporeʹs Government Ran a Budget Surplus of $4