If there is an increase in the government budget deficit, the _____ loanable funds will _____, interest rates will _____, and the amount of borrowing will _____.

Question

Quizplus · Accepted Answer

An increase in the government budget deficit typically leads to an increase in the demand for loanable funds as the government needs to borrow more. This increased demand raises interest rates, which can lead to an increase in the amount of borrowing.

If There Is an Increase in the Government Budget Deficit