Multiple Choice
Suppose government expenditures on goods and services and net taxes both decrease,and expenditures fall by more than net taxes.The effects of these changes on the budget deficit cause
A) both the equilibrium interest rate and the equilibrium quantity of loanable funds to fall.
B) both the equilibrium interest rate and the equilibrium quantity of loanable funds to rise.
C) the equilibrium interest rate to rise and the equilibrium quantity of loanable funds to fall.
D) the equilibrium interest rate to fall and the equilibrium quantity of loanable funds to rise.
Correct Answer:
Verified
Correct Answer:
Verified
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