Use the Following Diagram to Answer the Following Questions

Multiple Choice

Use the following diagram to answer the following questions.

-Refer to Loanable Funds. An increase in the federal budget deficit financed by issuing U.S. Treasury bonds 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.