When the government increases its demand for loanable funds,it causes:
A)the demand for loanable funds curve to shift to the right.
B)the demand for loanable funds curve to shift to the left.
C)the supply of loanable funds curve to shift to the right.
D)the supply of loanable funds curve to shift to the left.

Question

Quizplus · Accepted Answer

When the government increases its demand for loanable funds, it means that it is borrowing more money. This increases the demand for loanable funds in the market, and as a result, the demand curve shifts to the right. This also leads to an increase in the interest rate in the market, as the supply of loanable funds is limited. Therefore, choice A is the correct answer.

When the Government Increases Its Demand for Loanable Funds,it Causes