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Government budget deficit influence the loanable funds

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Reference no: EM131329725

After you have studied Economics in the News on pp. 174-175, answer the following questions.

A. Why does the news article say that bond prices and interest rates move in opposite directions? Is it correct? Explain.

B. How does a government budget deficit influence the loanable funds market and why does a decrease in the deficit lower the real interest rate?

Reference no: EM131329725

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