If the government increases its borrowing, then at every interest rate there is a(n) _____ funds.

Question

Quizplus · Accepted Answer

When the government increases its borrowing, it creates an additional demand for funds, as it needs to borrow more money from the financial system to finance its spending. This additional demand for funds can put upward pressure on interest rates as lenders may charge higher interest rates to compensate for the increased risk associated with lending to the government.

If the Government Increases Its Borrowing, Then at Every Interest