Shit the demand curve or supply curve for loan able funds

Reference no: EM13693952

Suppose a fiscal stimulus package that called for a large increase in government spending actually increases governments’ budget deficit dramatically

a. When the government runs a larger budget deficit, dose that shit the demand curve or the supply curve for loan able funds?

b. Use a supply-and-demand diagram for loan able funds to show in which direction the relevant curve shifts.

c. According to the loan able funds framework, does the interest rate rise or fall as a result of the larger budget deficit?

d. According to the loan able funds framework, does national saving rise or fall as a result of the larger budget deficit?

e. According to the loan able funds framework, does investment rise or fall as a result of the larger budget deficit?

Reference no: EM13693952

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