15. In the loanable funds market of a closed economy, a government reduces its purchases, moving from a budget deficit of $100 million to a budget surplus of $50 million. Which of the following statements are correct? 1. Planned investment and consumption rise by $150 million. II. The government changes from a demander of funds to a supplier of funds. III. The equilibrium interest rate falls. II and III only. I only. I, II and III only. None of the statements are correct. I and II only.

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15.
In the loanable funds market of a closed economy, a government reduces its purchases,
moving from a budget deficit of $100 million to a budget surplus of $50 million. Which of the
following statements are correct?
1. Planned investment and consumption rise by $150 million.
II. The government changes from a demander of funds to a supplier of funds.
III. The equilibrium interest rate falls.
II and III only.
I only.
I, II and III only.
None of the statements are correct.
I and II only.
Transcribed Image Text:15. In the loanable funds market of a closed economy, a government reduces its purchases, moving from a budget deficit of $100 million to a budget surplus of $50 million. Which of the following statements are correct? 1. Planned investment and consumption rise by $150 million. II. The government changes from a demander of funds to a supplier of funds. III. The equilibrium interest rate falls. II and III only. I only. I, II and III only. None of the statements are correct. I and II only.
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