6. Consider the supply and demand diagrams for the financial market with interest rates on the...

 

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6. Consider the supply and demand diagrams for the financial market with interest rates on the vertical axis and quantity of financial capital on the horizontal axis. Suppose that the government runs a significant budget deficit. Which graph would most accurately predict the changes observed in the financial market as a result of this budget deficit? Note that the new curve is shown in gray. a. S curve shifts left: b. S curve shifts right: c. D curve shifts right: d. D curve shifts left: 6. Consider the supply and demand diagrams for the financial market with interest rates on the vertical axis and quantity of financial capital on the horizontal axis. Suppose that the government runs a significant budget deficit. Which graph would most accurately predict the changes observed in the financial market as a result of this budget deficit? Note that the new curve is shown in gray. a. S curve shifts left: b. S curve shifts right: c. D curve shifts right: d. D curve shifts left:

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A budget deficit means there is a decrease in national savings of the economy National Savings are t... View the full answer