Using a Graph Representing the Market for Loanable Funds, Show

question 113

Essay

Using a graph representing the market for loanable funds, show and explain what happens to interest rates and investment if the government budget goes from a deficit to a surplus.

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Definitions:

Offeror

The party in a contractual agreement who makes an offer to enter into a contract, awaiting acceptance by the offeree.

Stipulates

Specifies expressly, setting out terms or conditions clearly within an agreement or document.

Effective Upon Dispatch

A legal principle stating that an offer, acceptance, or revocation becomes effective when it is sent, not when it is received.

Specified

Clearly identified or defined in detail.