Suppose government expenditures on goods and services increase, transfers are unchanged, and taxes rise by less than the increase in expenditures. These changes in the government’s budget cause:
Group of answer choices
a. The equilibrium interest rate to rise and the equilibrium quantity of loanable funds to fall.
b. Both the equilibrium interest rate and the equilibrium quantity of loanable funds to rise.
c. Both the equilibrium interest rate and the equilibrium quantity of loanable funds to fall.
d. The equilibrium interest rate to fall and the equilibrium quantity of loanable funds to rise.