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-(Figure: Crowding Out) Use Figure: Crowding Out. The demand for loanable funds curve D_LF₁ will shift to D_LF₂ when there is a(n) :

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Use the following to answer questions: -(Figure: Crowding Out) Use Figure: Crowding Out. The demand for loanable funds curve D_LF₁ will shift to D_LF₂ when there is a(n):

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An increase in the government budget deficit typically leads to higher demand for loanable funds as the government borrows more, shifting the demand curve to the right.

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