Use the following to answer questions:
-(Figure: Loanable Funds Market II)Use Figure: Loanable Funds Market II.A decrease in government borrowing will shift the domestic demand for loanable funds to the _____ and _____ the interest rate.

Question

Use the following to answer questions: 
-(Figure: Loanable Funds Market II)Use Figure: Loanable Funds Market II.A decrease in government borrowing will shift the domestic demand for loanable funds to the _____ and _____ the interest rate.

Quizplus · Accepted Answer

A decrease in government borrowing reduces the demand for loanable funds, shifting the demand curve to the left and leading to a decrease in the interest rate.

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