If the federal government planned to expand the space program, how might this affe

ct interest

rates?

a. An expanded space program might force the federal government to increase its budget deficit.

Consequently, there is a greater demand for loanable funds. The likely overall impact would

therefore be upward pressure on interest rates.

b. An expanded space program might force the federal government to increase its budget deficit.

Consequently, there is less demand for loanable funds. The likely overall impact would therefore

be upward pressure on interest rates.

c. An expanded space pr

ogram would force the federal government to decrease its budget deficit.

Consequently, there is a less demand for loanable funds. The likely overall impact would

therefore be upward pressure on interest rates.