Scenario 32-1

During a recession government revenues from the income tax fall and government transfers rise as the reduction in income and the rise in unemployment raise the number of people who qualify for benefits.
-Refer to Scenario 32-1. In the market for loanable funds which curve(s) does this change in the deficit shift? Which direction does it shift?

Question

Scenario 32-1
​
During a recession government revenues from the income tax fall and government transfers rise as the reduction in income and the rise in unemployment raise the number of people who qualify for benefits.
-Refer to Scenario 32-1. In the market for loanable funds which curve(s) does this change in the deficit shift? Which direction does it shift?

Quizplus · Accepted Answer

The Answer of Scenario 32-1
​
During a recession government revenues from the income tax fall and government transfers rise as the reduction in income and the rise in unemployment raise the number of people who qualify for benefits.
-Refer to Scenario 32-1. In the market for loanable funds which curve(s) does this change in the deficit shift? Which direction does it shift?

Scenario 32-1 ​

Scenario 32-1