Suppose That Peru Has a Budget Surplus, and Then Goes

question 172

Multiple Choice

Suppose that Peru has a budget surplus, and then goes into deficit. Which statement best predicts the consequences?

• A) National saving would increase, and Peru's supply of loanable funds would shift to the left.
• B) National saving would increase, and Peru's demand for loanable funds would shift to the right.
• C) National saving would decrease, and Peru's supply of loanable funds would shift to the left.
• D) National saving would decrease, and Peru's demand for loanable funds would shift to the right.