Question 59 (Multiple Choice Worth 1 points) (05.05 MC) When the government borrows money to fund deficit spending, whic

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Question 59 Multiple Choice Worth 1 Points 05 05 Mc When The Government Borrows Money To Fund Deficit Spending Whic 1 (389.92 KiB) Viewed 52 times

Question 59 (Multiple Choice Worth 1 points) (05.05 MC) When the government borrows money to fund deficit spending, which of the following is likely to occur? Nominal interest rates will fall as national savings increases. O The central bank must reduce the money supply by an amount equal to the deficit. Supply of loanable funds to the private sector falls, and the real interest rate increases. O The deficit tends to encourage additional private investment to match any new government spending. O The government debt will fall by an amount equal to the new deficit.