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Loanable Funds

(A) The government increases spending without raising taxes. (Assume that the government is already running a deficit.). Loanable Funds. S LF 1. r2. Real Interest Rate. r1. D LF 2. D LF 1. 0. Q LF 1. Q LF 2. Quantity of Loanable Funds.

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Loanable Funds