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Figure: Crowding Out
-(Figure: Crowding Out) Look at the figure Crowding Out. The demand for loanable funds curve D_LF₁ will shift to D_LF₂ when there is:

Question

Use the following to answer questions : Figure: Crowding Out -(Figure: Crowding Out) Look at the figure Crowding Out. The demand for loanable funds curve D_LF₁ will shift to D_LF₂ when there is:

Quizplus · Accepted Answer

An increase in the government budget deficit leads to higher demand for loanable funds, shifting the demand curve from D_LF₁ to D_LF₂.

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