If the government increases its borrowing, then at every interest rate there is a(n) _____ funds. additional demand for increase in the supply of additional supply of decrease in the supply of

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09-03-2020
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If the government increases its borrowing, then at every interest rate there is a(n) _____ funds. additional demand for increase in the supply of additional supply of decrease in the supply of

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topeadeniran2 topeadeniran2 · Answer 1 · 2020-03-12T04:02:49+01:00

Answer: additional demand for funds.

Explanation: If there is an increase in borrowing by the government, this means that at every interest rate, the government makes additional demand for funds.

A lot of reasons can be attributed to an increase in government's borrowing. Government may borrow as a way to pay back existing loans or provision of infrastructure such as schools, roads, hospitals for its people. In a case when government's borrowing rises, the government will demand for money at different interest rates.