Use the Following Diagram to Answer the Following Questions

Multiple Choice

Use the following diagram to answer the following questions.

-Refer to Loanable Funds. A shift in financing of the federal budget deficit away from public debt to internal financing would most likely:

A) cause demand to shift from D₂ to D₁.
B) cause demand to shift from D₁ to D₂.
C) cause the equilibrium rate of interest to change from i₂ to i₁.
D) cause the equilibrium quantity of funds supplied to fall.