A tax cut that increases the budget deficit results in ________ in the ________ loanable funds.
A) an increase; demand for
B) an increase; supply of
C) a decrease; demand for
D) a decrease; supply of
E) no change; either the demand for or the supply of

Question

Quizplus · Accepted Answer

A tax cut that increases the budget deficit typically leads to an increase in the demand for loanable funds, as the government needs to borrow more to finance the deficit.

A Tax Cut That Increases the Budget Deficit Results in ________