As a government adopts an expansionary fiscal policy:
A) the demand for loanable funds increases causing interest rates to rise.
B) the demand for loanable funds decreases causing interest rates to fall.
C) the supply of loanable funds increases causing interest rates to rise.
D) the supply of loanable funds decreases causing interest rates to fall.
E) the demand for loanable funds does not change.
Correct Answer:
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Q12: 12 A government budget deficit would tend
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Q15: The conflicting effects of an expansionary fiscal
Q17: In a closed economy, expansionary fiscal policy
Q18: In an open economy, expansionary fiscal policy
Q19: In a closed economy, an expansionary fiscal
Q20: In an open economy, an expansionary fiscal
Q21: In an open economy, contractionary fiscal policy
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