Which of the following contains a list only of things that decrease when the budget deficit of the U.S.increases?
A)U.S.net exports,U.S.domestic investment,U.S.net capital outflow
B)U.S.supply of loanable funds,U.S.interest rates,U.S.domestic investment
C)U.S.imports,U.S.interest rates,the real exchange rate of the dollar
D)None of the above is correct.

Question

Quizplus · Accepted Answer

When the budget deficit increases, the government borrows more money, which reduces the supply of loanable funds. This drives up interest rates, which discourages domestic investment and net exports.

Which of the Following Contains a List Only of Things