Figure 21-1

-Refer to Figure 21-1.The loanable funds market is in equilibrium,as shown in the figure above.As a result of an increase in the government budget deficit,the ________ for loanable funds will ________,thereby ________ the equilibrium real interest rate and ________ the equilibrium quantity of loanable funds.
A) demand; rise; increasing; decreasing
B) supply; rise; decreasing; increasing
C) demand; fall; decreasing; decreasing
D) supply; fall; increasing; decreasing
Correct Answer:
Verified
Q70: Figure 21-1 Q143: An increase in public saving has what Q144: A decrease in the real interest rate Q147: Using the market for loanable funds,which of Q149: Because _ in the government budget deficit Q150: An increase in the real interest rate Q151: The demand for loanable funds is determined Q155: If technological change increases the profitability of Q156: Economist Steve Landsburg has pointed out that Q158: The federal budget deficit can be reduced
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