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MMLU / An increase in the federal deficit may affect the demand for loan funds and…

Problem

Answer published by the source. Consult the official source to check your work against its answer.

question

An increase in the federal deficit may affect the demand for loan funds and therefore the real interest rate and investment spending. Which of the following gives the correct direction of these effects? Demand for loanable funds      Real interest rate      Investment spending

choices

  1. Increases           Increases      Increases
  2. Decreases           Decreases      Decreases
  3. Decreases           Decreases      Increases
  4. Increases           Increases      Decreases

subject

high_school_macroeconomics

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Source and history

Official source

initial import