If the Government Budget Deficit Increases, Which Curve in the Market

question 171

Essay

If the government budget deficit increases, which curve in the market for loanable funds shifts, which direction does it shift, and what happens to the interest rate?

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Definitions:

Ultimate Consumers

The people who use the products and services purchased for a household. Also called consumers, buyers, or customers.

Organizational Buyers

Entities such as businesses, governments, and institutions that purchase goods and services for organizational purposes.

Not-for-Profit Organizations

Organizations that operate for purposes other than making a profit, typically focusing on social, educational, charitable, or cultural objectives.

Institutional Buyers

Organizations or entities such as schools, hospitals, and governments that purchase goods or services in large quantities, often at negotiated prices.