A decrease in the government budget deficit decreases the _______ loanable funds and an increase in the government budget surplus increases the _______ loanable funds.

Question

Quizplus · Accepted Answer

A decrease in the government budget deficit reduces the demand for loanable funds because the government borrows less. An increase in the government budget surplus increases the supply of loanable funds as the government can lend more or reduce its borrowing.

A Decrease in the Government Budget Deficit Decreases the _______