Graph 32-1 -In Graph 32-1, an Increase in the Government Budget Deficit

Multiple Choice

Graph 32-1

-In Graph 32-1, an increase in the government budget deficit causes the equilibrium interest rate to:

A) be unchanged
B) increase from r₁ to r₂ in panel (a)
C) increase from E₁ to E₂ in panel (c)
D) decrease from r₂ to r₁ in panel (a)
E) both B and C