All else constant,an increase in the amount of borrowing by the federal government would reduce the amount of money available for businesses to borrow to finance investment spending.

Question

Quizplus · Accepted Answer

If the federal government increases its borrowing, it may lead to a decrease in the supply of loanable funds available for businesses to borrow, which could result in higher interest rates for businesses looking to borrow funds for investment spending. As a result, the amount of money available for businesses to borrow for investment spending would be reduced.

All Else Constant,an Increase in the Amount of Borrowing by the Federal