How Does a Decrease in Government Budget Deficits Affect the Equilibrium

question 110

Multiple Choice

How does a decrease in government budget deficits affect the equilibrium interest rate in the loanable funds model?

• A) Interest rate increases.
• B) Interest rate decreases.
• C) Interest rate stays the same.
• D) Interest rate first increases and then decreases back to the original level.

---

Definitions:

Special Verdict Stage

A phase in a trial where the jury is asked to make findings on specific factual questions before reaching a verdict.

Offer of Proof Stage

A phase in legal proceedings where a party indicates what evidence would be provided to prove a point or defense, often after an objection to said evidence.

Stare Decisis

A legal principle that mandates courts to follow the precedents set by previous decisions in similar cases.

Writ of Certiorari

An order by a higher court to review the decision of a lower court or administrative agency.