1453EconomicsMedium
Which of the following statement regarding the loanable funds market is true?
AA decrease in the government budget deficit increase the real interest rate
BAn increase in the government budget deficit shifts the supply of loanable funds to the left
CAn increase in private saving shifts the supply of loanable funds to the left
DAn increase in the government budget deficit shifts the supply of loanable funds to the right
Correct answer
B. An increase in the government budget deficit shifts the supply of loanable funds to the left
Explanation
The correct answer is An increase in the government budget deficit shifts the supply of loanable funds to the left.