Figure 33-4
-Refer to Figure 33-4.Suppose that the government goes from a budget surplus to a budget deficit.The effects of the change could be illustrated by

Question

Figure 33-4 
-Refer to Figure 33-4.Suppose that the government goes from a budget surplus to a budget deficit.The effects of the change could be illustrated by

Quizplus · Accepted Answer

A government budget deficit reduces national savings, which shifts the supply of loanable funds to the left, leading to higher interest rates and reduced investment. This is reflected by a leftward shift in the supply curves in both panels.

Figure 33-4 -Refer to Figure 33-4.Suppose That the Government Goes from a Goes