A ____ federal government deficit increases the quantity of loanable funds demanded at any prevailing interest rate, causing an ____ shift in the demand schedule.
A)higher; inward
B)higher; outward
C)lower; outward
D)None of these are correct.

Question

Quizplus · Accepted Answer

A higher federal government deficit increases the quantity of loanable funds demanded because the government needs to borrow more to finance its deficit, leading to an outward shift in the demand schedule for loanable funds.

A ____ Federal Government Deficit Increases the Quantity of Loanable