Macroeconomics 11th Edition by Michael Parkin

Exercise 30

India Budget Will Aim to Cut Deficit
In India, the government's budget deficit will shrink to 5.1 percent of GDP from its current 5.6 percent as the government cuts its spending and stronger economic growth increases tax revenues. To finance its current debt, the government will borrow $108.2 billion.
a. Explain how the government's budget deficit and the stronger economic growth influence the loanable funds market in India.
b. When the Indian government borrows to finance its current debt, what changes will occur in the global financial market