Asked by Tatiana Jones on May 21, 2024
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When the government budget deficit rises, national saving is reduced, interest rates rise, and investment falls.
Government Budget Deficit
The financial situation where a government's expenditures exceed its revenues within a specific period, leading to borrowing or depletion of reserves.
National Saving
The sum of private and public savings in a country, essentially the total income of the nation that remains after paying for consumption and government expenditures.
Interest Rates
The fee, shown as a proportion of the total loan amount, that a lender demands from a borrower for the use of their funds.
- Scrutinize the effects that fiscal policy has on the availability of funds for loans, interest rate trends, and investment decisions.
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Learning Objectives
- Scrutinize the effects that fiscal policy has on the availability of funds for loans, interest rate trends, and investment decisions.
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