Graph 32-1 -In Graph 32-1, an Increase in the Government Budget Deficit

question 16

Multiple Choice

Graph 32-1

-In Graph 32-1, an increase in the government budget deficit causes the equilibrium interest rate to:

• A) be unchanged
• B) increase from r₁ to r₂ in panel (a)
• C) increase from E₁ to E₂ in panel (c)
• D) decrease from r₂ to r₁ in panel (a)
• E) both B and C

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