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The Congressional Budget Office Reported That Federal Budget Deficits in the United

Question 109

Multiple Choice

The Congressional Budget Office reported that federal budget deficits in the United States were likely to increase in future years,and these higher deficits might "pose a threat to the economy by crowding out business investment and threatening a spike in interest rates." This crowding out of business investment would be represented graphically by


A) a shift in the demand curve for loanable funds to the right.
B) a shift in the demand curve for loanable funds to the left.
C) a movement to the right along the demand curve for loanable funds.
D) a movement to the left along the demand curve for loanable funds.

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