If Canada Goes from a Large Budget Deficit to a Small

question 159

Multiple Choice

If Canada goes from a large budget deficit to a small budget deficit,it will

• A)increase private saving and so shift the supply of loanable funds right.
• B)increase investment and so shift the demand for loanable funds right.
• C)increase public saving and so shift the supply of loanable funds right.
• D)reduce national saving and shift the supply left.

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Definitions:

Aggregate Demand Curve

A graphical representation that shows the relationship between the overall price level in the economy and the total demand for goods and services at that price level.

Velocity of Money

The rate at which money is exchanged from one transaction to another, and how much a unit of currency is used in a given period.

ATM Machines

Automated Teller Machines where individuals can perform financial transactions, such as cash withdrawals, deposits, and fund transfers, without the need for direct interaction with bank staff.

Credit Cards

Financial instruments that allow users to borrow funds up to a pre-set limit for purchases or cash advances, with the expectation of paying back the borrowed amount over time.