In 2009,the U.S.government's budget deficit increased substantially.Other things the same,this means the
A)supply of loanable funds shifted to the right.
B)supply of loanable funds shifted to the left.
C)demand for loanable funds shifted to the right.
D)demand for loanable funds shifted to the left.

Question

Quizplus · Accepted Answer

An increase in the budget deficit means that the government is borrowing more money, which increases the demand for loanable funds. This would shift the supply of loanable funds to the left as there is a higher demand for funds and a reduced supply of funds available for lending. Therefore, the correct choice is B.