All other things unchanged,a general increase in government borrowing will typically:

Question

Quizplus · Accepted Answer

When the government borrows more, it increases the demand for loanable funds, shifting the demand curve to the right. This will lead to an increase in interest rates, as the supply of loanable funds is limited. Therefore, option B is correct. The other options are incorrect because they do not take into account the impact of government borrowing on the loanable funds demand curve and interest rates.

All Other Things Unchanged,a General Increase in Government Borrowing Will