Answer to Question #90523 in Macroeconomics for Sung Eun Seok

Question

15. An increase in the government budget deficit increases the ____ loanable funds and an
increase in the government budget surplus increases the ____ loanable funds.
Select one:
A. supply of; supply of
B. supply of; demand for
C. demand for; supply of
D. demand for; demand for

Answer 1

15. An increase in the government budget deficit increases the demand for loanable funds and an

increase in the government budget surplus increases the supply of loanable funds.

So, the correct answer is C.