If the Government Begins to Run a Larger Budget Deficit

question 135

Multiple Choice

If the government begins to run a larger budget deficit, the demand for loanable funds ________ and the real interest rate ________.

• A)decreases; falls
• B)decreases; rises
• C)increases; rises
• D)increases; falls
• E)increases; rises or falls depending on the change in the supply of loanable funds

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Definitions:

Graduate Student

An individual who has completed a bachelor's degree and is pursuing advanced study in a specialized field at the master's or doctoral level.

Positive Psychology

A branch of psychology focused on the study and promotion of positive aspects of human life, such as happiness and well-being.

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An emphasis or concentration on understanding events, circumstances, and contexts from the past.

Pathology

The study of diseases and the structural and functional changes they cause.