All else equal,an increase in the government's budget deficit accompanied by a decrease in corporate taxes would definitely result in
A) an increase in the equilibrium real interest rate.
B) a decrease in the equilibrium real interest rate.
C) an increase in the equilibrium level of saving and investment.
D) a decrease in the equilibrium level of saving and investment.

Question

Quizplus · Accepted Answer

An increase in the government's budget deficit typically leads to higher demand for loanable funds, which can increase the equilibrium real interest rate.

All Else Equal,an Increase in the Government's Budget Deficit Accompanied