Explain how an increase in government expenditure will change the government’s budget balance and the loanable funds market.

The International Monetary Fund (IMF) reported that it acted effectively in combating the global recession, especially in Eastern Europe. The IMF made $163 billion available to developing countries. The IMF required countries with large deficits to cut spending or not increase it, but it urged the United States, Western European countries, and China to run deficits to stimulate their economies.