If the budget deficit were reduced,
A)interest rates and investment would increase.
B)interest rates would increase and investment would decrease.
C)interest rates and investment would decrease.
D)interest rates would decrease and investment would increase.

Question

Quizplus · Accepted Answer

Reducing the budget deficit typically decreases government borrowing, which can lead to lower interest rates. Lower interest rates make borrowing cheaper, encouraging more investment.

If the Budget Deficit Were Reduced