Use the following to answer questions:
-(Figure: Crowding Out)Use Figure: Crowding Out.If The domestic demand for loanable funds curve shifts to the right,the result will be a(n)_____ in the interest rate and a(n)_____ in the total amount of borrowing in the funds market.

Question

Use the following to answer questions: 
-(Figure: Crowding Out)Use Figure: Crowding Out.If The domestic demand for loanable funds curve shifts to the right,the result will be a(n)_____ in the interest rate and a(n)_____ in the total amount of borrowing in the funds market.

Quizplus · Accepted Answer

When the domestic demand for loanable funds curve shifts to the right, the demand for funds increases, leading to an increase in the interest rate and an increase in the total amount of borrowing in the funds market. This is known as the crowding-out effect, where increased government borrowing leads to a decrease in private borrowing.

Use the Following to Answer Questions